Fraud detection and prevention is always the best way to prevent bad actors – fraudsters and hackers who operate online – from harming your business.
But chargebacks happen to all businesses. So, knowing how to recognise and fight chargebacks that you think are unfair or fraudulent is vital.
Why? Because it will help you recover some of the costs they incur and prevent your business from repeatedly being targeted by fraudsters.
Successfully fighting chargebacks will also prevent your chargeback rate from becoming too high. If that happens, card networks (such as Visa or Mastercard) can fine your business, increase payment processing costs, and even prevent you from processing card payments altogether.
Here are some things you can do to fight chargebacks.
1. Offer great customer service
Effective customer service is an excellent way to fight chargebacks. Get in touch with a customer after they file a dispute to understand their issue and, if possible, resolve it through your own channels. If done correctly, they might cancel the chargeback request.
2. Learn the chargeback reason codes
You will receive a reason code whenever a cardholder initiates a chargeback against your business. Understanding the most common codes and knowing exactly why a customer has filed a dispute will give you the knowledge you need to fight it successfully.
3. Understand chargeback regulations
Chargeback regulations can differ depending on several factors, including the markets you sell in and the payment method used. So, it’s vital to stay up to date with regulations and best practices to deal with them.
You can make your life easier by partnering with a firm that can do this for you, such as a payment service provider or fraud specialist.
4. Write a comprehensive rebuttal letter and provide evidence
Rebuttal letters are critical to successfully fighting chargebacks. By writing one, you can argue against the cardholder’s dispute and provide detailed evidence to persuade the issuing bank to reverse the chargeback.
Some of the evidence you might use includes these things:
Proof of delivery
Customer verification methods used
Records of any customer service communications
5. Find the right partner
When it comes to fighting fraud, you’re not alone. In fact, most businesses have partners that help them monitor fraud and actively fight it to keep their business safe and profitable. These are usually fraud specialists or payment service providers (PSP).
What do these firms offer? Machine-learning, AI-powered fraud tooling that helps you increase conversion and reduce fraud risk to ensure you’re protected and profitable.
So, how can partnering with a fraud specialist help you prevent and fight chargeback and other types of fraud? Let’s take a look.
