Reducing Chargebacks & Lowering Refunds
Payer Authentication
Chargebacks occur when a customer goes directly to their credit card issuing bank, ie: Bank One and files for a refund by claiming that something in the sales process has not been correct or as represented. Examples of reasons why a customer might file a chargeback could be that they claim they never received the product, the actual product is not what they expected, the product does not work, or that only part of the order was received.
The difficulty with chargebacks is that they result in several unpleasant outcomes. First, not only does the merchant incur a chargeback fee but the merchant also typically loses the revenue from the sale. The merchant will lose the revenue from the sale because part of the chargeback process involves the sale amount being debited from their account while the chargeback is disputed. Seldom does the merchant also get the product returned by the customer. Second, a high chargeback rate can increase the risk of higher merchant fees and even increase the risk that the merchant will lose their merchant account altogether.
Fraud is a typical reason why chargebacks are so high. There are numerous ways that a fraudster can take advantage of standard business practices. Cambridgecommerce has developed a technology which is a powerful new tool for merchants that can put an end to the current security ‘arms race’ with fraudsters. We call it Payer Authentication because it definitively identifies that a customer is the legitimate cardholder for a specific transaction and finally provides a level of security close to a signed-sales-receipt purchase for card-not-present purchases. This technology works for card-not-present purchases including both phone and web transactions. By collecting added information and scanning databases to “know” a customer from their existing credit card history at the time of authentification, we can help merchants substantially reduce chargebacks by returning an inappropriate chargeback directly to the issuing bank ie: Bank One, when it is processed against the merchant. Therefore, it will never hit the account of the merchant.
Authenticated orders not only entitle merchants to protections against chargebacks but also to new representment rights, something never before offered by the card associations. In addition, by authenticating transactions, merchants can qualify for new lower interchange fees. Authentication is applicable on credit and debit cards issued anywhere in the world so it also provides new protection for merchants accepting international orders. Payer Authentication finally offers merchants a proactive indication of the level of risk for an order before authorization.
Chargeback reduction services include a highly effective and unique chargeback dispute process, which has consistently achieved greater than a 70% success rate.
Customized fraud scoring is another aspect of Payer Authentication. Fraud scoring is important because as merchants market various products in different parts of the country, different scoring models work better in various regions or with different demographics. Our fraud scoring system makes it easy to see what works best in a given set of circumstances because it eliminates the problem of having to choose one scrubbing logic over another. We can combine up to ten unique risk scoring systems simultaneously, offering clients the strength and complexity of a diverse array of scoring methodologies in one sophisticated and user-friendly tool.
Refund Controls
High refund rates increase costs and take up administrative time. They also make merchants appear to their processor to have less than optimal products or marketing practices. Part of the solution is to use tools to help you make wise decisions about managing refunds. Another tool can be utilized by customer service operators to make real-time decisions about whether or not to refund a transaction.
Reporting & Risk Analytics
Easy to read, real time internet reporting is a fundamental tool merchants can utilize for risk analysis and mitigation services.
Reporting and Risk Analytics services provide clients with the ability to isolate and address specific elements of risk while at the same time improving the overall conversion rates and efficiency of their business.
Reporting and Risk Analytics services take a significant step beyond automated reporting processes and also allows merchants to actively provide feedback and guidance pertinent to the card-not-present industry.
