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How Excessive Chargebacks Negatively Impact Merchant Revenue

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Chargebacks have been around since the advent of credit and debit cards. Occasionally real incidences of accidental purchases and fraud happen, but the trend towards buyers remorse and friendly-fraud makes it difficult to distinguish a justified chargeback or dispute.

Reluctance of Merchants to Accept Cards for Purchases

Developing a fear of chargebacks and potential chargebacks can make some merchants reluctant to accept cards as a form of payment for purchases, especially with online sales. Smaller merchants cannot take the hit of a backed-out sale as easily as larger companies, although it hits any company directly in the pocketbook. Making the decision to quit accepting cards can limit your income potential.

Difficulty Determining Legitimate Returns

Not having access to the right information and alerts can make it difficult or impossible to determine whether a return or chargeback is legitimate. Deliberate fraud and friendly-fraud can overwhelm merchants. Incorporating the use of chargeback services makes it easier to spot the fraud and stop unnecessary or unwarranted chargebacks and disputes. You'll have the information you need to make immediate determinations and provide immediate refunds for qualified disputes.

Frustration in Time Lost Dealing With Disputes

Every dispute for card purchases has to have time designated out of a day to handle. Frequent chargebacks and disputes can begin to grab more and more of your time and attention. Frustration mounts when you begin to add up the losses of merchandise, revenue, and time dealing with the problem.

Revenue Lost from Fraudulent Chargebacks

Chargebacks, for any reason, mean a loss of revenue for the merchant. In cases of online sales, it also includes a loss of merchandise. It can hit a company hard and stress the revenue stream. A break in your money flow can begin to interfere with basic operations, especially when chargebacks are on a steady incline throughout the marketplace. It's important to add safeguards to protect your business income from this problem.

Increased Friction Between Merchant, Cardholder, and Card Issuer

The desire to please a cardholder can place the card issuer and merchant at odds. Chargebacks increase the level of friction between all involved in disputed transactions. Adding a layer of protection against fraudulent chargebacks allows you to make refunds easier and less stressful.

Drastically reduce your revenue losses from chargeback fraud by utilizing professional services that keep you on top of the problem. A company like Ethoca will help you fight the potential loss of revenue.

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