Chargebacks: Myth vs. Reality

June 17, 2023

Chargebacks are expensive, time-consuming, and resource draining. They’re burdensome for all merchants, but smaller retailers can especially struggle if they do not have the necessary in-house expertise to make an impact.

Debunking common misconceptions about chargebacks and addressing common issues in the dispute resolution procedures gives a solid foundation for those merchants seeking to implement an effective chargeback program.

The following is a breakdown of some chargeback myths and realities:

MYTH: You can’t win chargeback disputes

REALITY: Implementing a seller’s expertise can not only ease the time and resources needed to dispute chargebacks and reclaim lost dollars, but a few are able to provide internet recovery rates of more than 50 percent to substantially boost your bottom line

MYTH: Winning chargeback disputes will decrease your monthly chargeback ratio with your acquiring bank

REALITY: Chargebacks aren’t reduced if obtained; once they occur, they count against your chargeback ratio, even though you may be regaining cash

MYTH: It’s not possible to win a disputed chargeback report if you don’t have a signed receipt

REALITY: Signs that a sale has been made can include a number of items aside from a signed receipt, such as photographs or emails proving a link between the individual receiving the merchandise as well as the cardholder, or demonstrating that the cardholder disputing the trade is in possession of the merchandise; which will definitely help dispute the chargeback

MYTH: You can’t lower your chargeback ratio without reducing sales

REALITY: There are lots of steps you can take to decrease your chargeback ratio without decreasing sales. A common method involves requiring customers to register their cardholder data by validating their info. Cardholders answer a string of questions only they would have the ability to answer, as well as pick a secret phrase or password. This feature allows you to confirm return traffic in a easy, non-intrusive manner, while allowing you to maintain legitimate sales and fight illegitimate chargebacks

MYTH: You can not battle PayPal disputes

REALITY: PayPal provides seller protection from chargebacks for retailers who meet the eligibility conditions according to Unauthorized Transactions or Item Not Received. The scope protects sellers for the whole amount of payment, and also waives the chargeback fee, if applicable

The truth is, chargebacks occur for a variety of reasons, but one thing is for certain: chargebacks account for revenue loss. While you do not need to be a chargeback know-it-all, comprehending the challenge you’re up against can make it possible to improve your operational measures to help you stop chargebacks dead in their tracks.