The Rise of Chargebacks

 

Did you know that the typical business will only hear from around 4 percent of their unsatisfied customers? That leaves the remaining 96 percent with the potential to file a chargeback against a merchant’s business, negatively impacting their bottom line.

The ability to maintain positive cash flow is one of the most important traits of successful small and midsized businesses. Unfortunately, chargebacks are one of the biggest obstacles merchants face when trying to grow their businesses. In fact, according to www.chargebacks911.com chargebacks are rising at a clip of 20 percent per annum, with merchants ultimately missing out on a whopping $118 billion in revenue due to unwarranted chargebacks each year.

Of course, there are legitimate reasons why a customer might issue a chargeback claim against a merchant (such as an item not being delivered). That said, so-called “friendly fraud” chargebacks have increased 41 percent over the last two years and are expected to cost merchants upwards of $25 billion a year by the year 2020 alone.

Historically, customers have issued friendly fraud chargebacks against merchants for a wide array of reasons, including: the item was not as described or was defective, the original transaction was not authorized, or a recurring transaction was not cancelled as requested. While 49 percent of friendly fraud chargebacks resulted from a simple misunderstanding (like the cardholders not even knowing they were filing a chargeback), 40 percent of consumers who commit friendly fraud will do so again within 60 days.

So, as you can see, by abusing the chargeback process to secure a refund, friendly fraudsters can do significant damage to a merchant’s small or midsized business. That’s why it’s imperative that merchants have a payments partner they can trust to help them fight back against unwarranted chargebacks.

Chargeback Reduction Powered by North American Bancard

At North American Bancard, we’ve been leading the charge to protect merchants against unwarranted chargebacks for years. “We understand how imperative maintaining proper cash flow is to the hardworking small and midsized business owners we partner with,” said Terri Harwood, Chief Operating Officer of North American Bancard. “We also know the challenges those business owners face in the form of unwarranted chargebacks. That’s why we’ve always been so proactive about giving merchants the tools they need to more effectively manage and resolve chargebacks and other disputes.”

The most exciting new development in NAB’s ongoing mission to fight back against unwarranted chargebacks is the unveiling of Payments Hub, the transaction leader’s brand new, online merchant portal. “The Hub” features a handy disputes tab, and an easy-to-use interface that allows merchants to quickly and easily view all their current chargeback and retrieval requests, whether they are “closed,” “under review,” or have “action required.” Merchants can even add comments and supporting documents to help them dispute unwarranted chargebacks. “By simplifying and streamlining the dispute management process for our merchants via our safe and secure online merchant portal, we have significantly reduced the time our merchants need to spend dealing with chargebacks,” Bom Lee, vice president of sales for NAB, said. “This allows them to spend more time dealing with the day-to-day tasks of running their businesses.”

In addition to dispute management, Payments Hub also enables merchants to access statements and reports, set up customized alerts, accept online payments via a virtual terminal, order supplies, and so much more.

For more information on how you can help NAB’s 350,000 satisfied merchants continue to grow their businesses, while helping yourself to some of the biggest bonuses and most rewarding residuals in the payments industry, please visit www.gonab.com or call (888) 229-5229.