Michael Mallon, director, Global Product Management, Accertify

While the holidays may seem like a distant memory for most retailers, teams who manage the disputes process are in the midst of their busy season and typically see volumes peak in the January and February timeframes. Based on a sampling of Accertify’s retail clients, dispute volumes are typically 40% higher in January versus November and December.

Fraudsters understand that merchants often relax their thresholds for reviewing orders during the holiday season, allowing for more potentially risky orders to be fulfilled. The less stringent fraud rules coupled with the sheer volume of orders placed from Thanksgiving through Christmas drives dispute volumes and make it challenging for merchants to respond to disputes with the required documentation in the allocated times.

Managing the disputes process is complicated and disputing a chargeback can be a manual and labor-intensive process for a merchant. To increase the likelihood of success when responding to a chargeback, merchants need to understand the requirements and processes for each network brand and reason code. Additionally, analyzing historic data can help you understand your business’ success rate in winning chargebacks and will help you to prioritize and optimize limited resources for the best outcome.

A defined and proactive chargeback management process will help to protect your brand from becoming an easy target for fraudsters and will help you to protect your bottom line.

Additionally, in 2018 the timeline for responding to some disputes will decrease from 45 days to 30 days. This change will provide a faster resolution for disputes, but may create some new challenges for merchants who are already struggling to manage their disputes process in the current timeframes.

While it may be too late to impact the volume of 2017 holiday dispute cases, below are some tips on how to start preparing now for the 2018 holiday crunch.

Prioritize Your Chargebacks

Not all chargeback disputes are winnable. Understand the documentation requirements for responding to each reason code and prioritize your team’s resources and time against the high-dollar disputes where you believe you have enough evidence to win.

Train your Staff

In anticipation of higher volumes of disputes in January and February, work with your team to ensure that there is a clear process for prioritizing and compiling a response to each dispute type by network to optimize your team’s efforts and improve your likelihood of success.

Use Social Media   

Fight friendly fraud with compelling evidence from social media. Look for social media posts showing the customer wearing or displaying the disputed item. For example, a photo of a customer wearing or using an item that customer claimed was not received can often be enough evidence to win a chargeback.

Ensure Clear Return Policies – Online and In-store    

Provide customers with a clearly defined policy of returns at points of sale to reduce disputes and support your case in fighting a chargeback. For online sites, simple changes such as requiring a check box acknowledging the return policy and ensuring that the business name on the credit card statement is one that customers will recognize help to reduce customers from raising a chargeback.

Many merchants are still relying on a one-size-fits-all approach to managing their disputes process. They may not respond to any chargebacks as they view chargebacks as a cost of doing business. This approach leaves these merchants open to high rates of friendly fraud. Alternatively, merchants who respond to every chargeback are likely spending too much time and resources responding to inquiries with a low likelihood of success.

Working to implement some simple changes, such as those outlined above, can drive a reduction in total disputes, and optimize resources and revenue recovery. Partnering with a disputes management software platform and/or outsourcing partner can provide merchants with the tools, data and resources to effectively and efficiently manage disputes. Additionally, partnering with a disputes platform provider will help merchants be prepared for the reduced timeframes to resolve certain disputes and can improve revenue recovery rates.

 Accertify specializes in fraud prevention and chargeback management.