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The Right Questions to Ask When Selecting a Chargeback Management Provider

Chargebacks are the bane of businesses big and small.

That’s where chargeback management services come in. With the right chargeback management services, you can recoup would-be lost revenues while keeping costs low. Unfortunately, if you pick the wrong chargeback management company, you could end paying them more than you recoup in returned chargebacks. You might win some moral victories, but those don’t pay the bills, do they?

That’s why it’s important to select the right chargeback management service. And that starts with asking the right questions.

Wondering what you should ask prospective chargeback solution providers? Below, we’ve outlined some common questions you should ask. We also outlined what the “right” answer should look like.

Questions to Ask Potential Chargeback Providers

QUESTION: What tasks Does Your Platform Integrate?

The Good Answer: As much as possible. The more integrations, the better.

Chargebacks come from many different card networks and issuing banks. A good chargeback management service will integrate as many tools as possible, covering the most sources possible.

Doing so keeps costs low, allowing providers to pass on the savings to customers. By keeping costs low, the provider is also in a better position to serve customers.

Some of the things that good providers integrate include: your transaction gateway and CRM, dispute management tools from multiple card networks (Visa, Mastercard, Discover),  fraud notices, alert services Ethoca and Verifi, duplicate alert safeguards, and representment services to fight chargebacks. Each of these require their own extensive integrations.

Good chargeback solution providers integrate as many effective solutions as possible, helping you to stay up to date and protected. They also automate as many tasks as they can, allowing you to put your labor hours to better use.

QUESTION: What Tasks Do I Have to Complete Manually? What is my team responsible for?

The Good Answer: Make sure you ask chargeback solution providers what tasks specifically must be completed manually. The more you must complete manually, the less value you get out of your provider. Why? You don’t want to waste a lot of time and resources taking care of the chargebacks yourself.

Prospective chargeback solution providers should also make it clear what you and your team are responsible for. This can vary a lot from provider to provider. The less on your plate, the better. A great chargeback solution provider will take care of many of the hassles, allowing you to focus on growing your business.

QUESTION: What Steps does the Provider Take to Prevent Chargebacks?

The Good Answer: This may be the most important question you can raise. Preventing chargebacks can save you a lot of hassles. By being proactive and trying to prevent chargebacks in the first place, you also have more options for recourse.

Make sure a prospective chargeback solution provider is using Ethoca and Verifi, which are programs offered by Visa and Mastercard. Ethoc’a Eliminator and Verifi’s Order Insight are designed to intervene in cardholder inquiries to deflect a dispute from happening. Visa Rapid Dispute Resolution is another important program that should be integrated into your solution.

Another powerful tool is a blacklist. If certain customers or issuing banks are continuously responsible for chargebacks, your business may be better off without them. Ask what other preventative measures your solution provider takes as well.

QUESTION: How Does the Provider Fight Friendly Fraud?

The Good Answer: Friendly fraud occurs when a customer circumvents your refund or dispute policy, instead first approaching their bank or card provider to issue a chargeback. Any chargeback solution provider worth their weight will allow you to fight friendly fraud within their platform.

Chargeback prevention is great, but sometimes it’s not enough. Your prospective chargeback management platform should also offer tools for fighting chargebacks that come from friendly fraud. A complete list of options and methods for fighting chargebacks should include representment. Automation can help keep burdens low during the fight.

QUESTION: Does Chargeback Prevention Help With Card-Present Chargebacks Too?

The Good Answer: Some chargeback providers specialize only in card-not-present chargebacks (such as an online order). In card-present brick-and-mortar transactions, when a chargeback is filed, the wrong provider won’t offer many options for fighting the chargeback. A good platform offers options for card-present chargebacks.

QUESTION: What Chargeback Don’t You Fight?

The Good Answer: Speaking of limitations, it’s important to ask your chargeback solution provider if any chargebacks aren’t covered, or if there are any limitations when it comes to fighting certain chargebacks. All other things equal, the more flexible the platform, the better.

QUESTION: What Types of Reports and Data Tools Are Offered?

The Good Answer: These days, data is power. Great software solutions often provide a lot of data and reporting options. By analyzing data, you can get a better grasp on your situation.

A chargeback solution platform should provide both real-time data and historical data, allowing you to analyze your current situation, and also past performance. So make sure you ask about data reports and tools. Also ask about how you can access such data.

QUESTION: What Do Your Typical Win Ratios Look Like?

The Good Answer: Win ratios refer to how often you can successfully fight off the chargeback and recover the revenues that rightfully belong to you. Win rates can vary from industry and company. That said, you typically want to see win rates between 60 to 80 percent.

QUESTION: What is the ROI on Your Platform?

The Good Answer: We already talked about this in the introduction, but a good chargeback management solution will help your lower your costs from transaction disputes. Your solution should cost significantly less than if you were to do nothing.

The ROI you’re aiming for is to first deflect as many disputes as possible. Then, to resolve disputes as efficiently as you can to avoid a chargeback. And then you should be able to fight any friendly fraud chargebacks and recover revenue with minimal effort.

A for every dollar a chargeback takes, it can cost you up to three dollars in lost inventory, fulfillment costs, time, resources, fees and penalties.

QUESTION: What Are Your Contract Terms?

The Good Answer: Make sure you take a long look at any contract before signing on the dotted line. Figure out costs, including whether they’re monthly or yearly. Also, take a long look at any guarantees, refund policies, and the like. Figure out if you’ll be provided a dedicated account manager as well and how many user accounts you’re allowed (more is better).

QUESTION: What Help Resources Are Offered?

The Good Answer: Even if the chargeback platform is intuitive and easy-to-use, you may have questions. Ask about resources. Good chargeback providers offer online resources, such as community forums, and also access to help support lines and chat services. The more options, the better.

QUESTION: What Merchant Platforms Does a Chargeback Solution Integrate With

The Good Answer: You’ll want a chargeback solution platform that allows you to integrate with your CRM, Point-of-Sale systems, shopping carts, and eCommerce management tools. You want a chargeback platform that integrates with the tools you already use.

QUESTION: What Security Measures Does the Provider Take?

The Good Answer: When fighting chargebacks, you’re going to deal with sensitive information. For example, you might have the customer’s contact information and credit card data on hand. You’ll want to make sure this data is secured within the chargeback platform itself, so what security measures they take. At a minimum, any provider should be PCI-DSS compliant.

Find the Chargeback Provider That’s Right For You

We offered some starting questions you can ask. However, this is just a start. Consider your needs and challenges while selecting the right chargeback management platform.

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