Chargebacks, whether they stem from fraudulent transactions performed by unknown criminals or legitimate cardholders, could cost e-commerce merchants $35 billion this year, up from $23 billion in 2018, according to a new white paper from MyChargeBack.
The company contends in the white paper by its European Vice President of Operations Judith Dayan Persson that the chargeback process remains significantly cumbersome for merchants, who operate at a disadvantage.
“Chargeback guidelines are complicated and require both patience and persistence to finish,” Persson writes in the paper. “And [they] are this way by design. For decades, major card issuers have had limited programs for training on claims management to registered service providers. Another complication is that chargeback guidelines are amended and supplanted with new material as often as twice a year. For chargeback professionals, the accurate processing of a transaction dispute requires not only a fluency with massive documents but also necessitates the ability to assimilate changes. That’s a tall order.”
New reason codes, new fraud types and antiquated systems being employed by issuers make dealing with chargebacks even more difficult amid an unprecedented Covid-induced surge in e-commerce transactions (with an attendant rise in true fraud and friendly fraud).
The paper outlines several suggestions for card networks and banks—including required training for all participants in the chargeback process and prioritizing dispute departments. Download the white paper here.