CNP Expo: Best Practices in Chargeback Management

May 20, 2014

CNP Expo: Best Practices in Chargeback Management For online retailers, up to half of all chargebacks can be classified as “friendly fraud,” which a merchant has the power to collect, if it can present its case properly. “Fight back,” urged Monica Eaton of Chargebacks911 in a Tuesday morning session of CNP EXPO in Orlando. According to panelists, the card brands have seen a huge number of “friendly fraud” chargebacks, but if a merchant can prove the product is in the consumer’s possession and being used, the bank will collect for the merchant. And, there are different ways to assemble that proof, including some new ones.

“A lot can be done with social media,” said Rick Lynch senior vice president of business development for Verifi, which provides chargeback-management technology.

Compelling evidence of friendly fraud can also be found in IP addresses, past purchases and email addresses, which retailers should send to banks with a note indicating the compelling nature of the evidence, according to Michael Mallon, product manager for Accertify. Mallon said he is helping clients win half of the cases of friendly fraud they choose to fight. The panelists also advised communicating with customers to avoid friendly fraud cases, which are often “buyer’s remorse.”

“So many times the customer is confused,” Lynch said. “Steer them toward the outcome you want before they call the bank.”

Eaton said merchants can take actions that help them avoid conflicts.

“Record the conversation,” she said. “Make sure they know you are monitoring the events.”

She also advised merchants to keep their phone lines open longer to handle consumer complaints and head off calls to the bank to cancel payment.

“Merchants are creating a lot of their own chargebacks with a lack of planning and inconsistency. Don’t try to get away with ignoring it,” she added.