CASE STUDY

National retailer lowers dispute volume and chargeback amounts

National Retailer sees 70% of inquiries resulting in deflections with Chargeback.

Bank of America Merchant Services has partnered with Chargeback to help merchants lower their dispute ratio, improve their win rate and spend less time managing disputes. With payment processing from Bank of America Merchant Services and Chargeback’s dispute resolution platform and tools, you get a solution that can help prevent post-authorization fraud.¹ The following case study is about a national retailer that offers an extensive assortment of soft goods and hard goods.

Situation

With dispute and win rates on par with industry averages (not to mention a near 100% response rate), most would think this national retailer’s dispute management was not in need of attention. Upon closer inspection, the team was not nearly as efficient as their potential would indicate.

As with many large companies that manage disputes internally, the Loss Prevention team is responsible for not only dispute management, but fraud prevention as well. This led to the biggest frustration for team members: transitioning from highly sophisticated and user-friendly tools for fraud prevention to rudimentary and inefficient tools for dispute management (e.g. common spreadsheets, computer documents and email strings).

These unsophisticated tools inadvertently required every team member to become subject matter experts of the card networks’ most current rules and regulations. This led to over-taxed resources and it was quite an ordeal if anyone left the team, since so much knowledge was stored in each individual team member. It also made hiring and training new team members exceedingly difficult.

Solution

In the spring of 2018, Chargeback met with the Loss Prevention team at the national retailer’s headquarters to explore the Chargeback App. About halfway through the presentation, the management team had the proverbial “ah-ha” moment upon learning of the app’s DocGen feature. The pre-populated response documents and guided workflows with embedded network rules based on transaction modifiers (physical goods, card-not-present, EMV® chip, etc.) could be a game-changer for their internal fraud team by shifting the burden of knowledge from humans to machines.

The national retailer was also intrigued with the Chargeback App’s searching, sorting and reporting capabilities. The reporting and exporting process would provide them with a deep understanding of disputes in the context of their team with the ability to assign, comment and sort information based on status and dispute lifecycle stage.

Not only would the Chargeback App help allow the Loss Prevention team to be more efficient in dispute management, the team would have fewer disputes to manage in the first place. Chargeback helps resolve disputes before they turn into chargebacks through the real-time communication of enhanced information to card issuers, which is then relayed to the cardholder in the event of a dispute inquiry.

Overall, the Chargeback App helped provide three key benefits that drove the national retailer’s decision to select it for dispute management:
 

More efficient team

Single workspace with aggregated data to automate dispute response
Reduced risk due to employee churn, human error and undocumented workflows

Fraud feedback loop

Data availability (e.g. win rate, dispute rate, reason code, customer info, etc.) to better understand trends and improve business workflows

Reduced chargeback amount

Help deflect certain disputes by preventing Visa® inquiries from becoming chargebacks

Results

Metrics: Visa Chargebacks down 55.62%, Monthly dispute volume down 13.23%

The national retailer began using the Chargeback App in July 2018, and the Loss Prevention team felt the immediate results of increased efficiency. Workflows and processes improved, and morale followed.

In addition, the national retailer is able to use the aggregated information from Chargeback to iterate on front-end fraud prevention methods. Examining the chargeback concentration among customer emails provides just one example of the feedback loop in action. The retailer found that each month, anywhere between 400 and 1,200 unique email addresses account for all chargebacks. However, the top 10% of email addresses account for more than 35% of the total chargeback amount. This signaled to the retailer that this particular fraud concentration could be significantly improved with upfront screening and/or blacklisting, as well as quick account suspension practices.

From January-June 2019, more than 70% of inquiries resulted in deflections. The total number of Visa chargebacks has also reduced month over month.

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