In this blog, we will show you proven strategies, backed by published research in the payments and chargeback industries, which are essential in avoiding chargebacks and winning disputes.
Chargeback disputes can be a nightmare for businesses, especially those in high-risk industries like iGaming (online gaming includes esports, betting, casinos etc.) and adult entertainment. These are detrimental to businesses in every possible way -? leading to loss of revenue, damage to reputation, and potential fees from banks and payment processors.
But there is no one-size-fits-all solution for all kinds of chargeback disputes. According to experts at TickleCharge, real solutions vary because they are based on the type of fraud that is responsible for the dispute.?
- Do not skimp on Customer Service: Providing excellent customer service can prevent chargeback disputes. According to a study by Salesforce, 77% of customers will recommend a company after a positive customer experience, reducing the likelihood of chargebacks. Additionally, a study by PayPal found that businesses with easy and transparent return policies have lower chargeback rates. For example, an online casino may offer live chat support to quickly address customer concerns and resolve issues. Similarly, an adult website may offer a dedicated support team to address customer inquiries and complaints.
- Respond Quickly and Effectively: One of the most critical steps in winning chargeback disputes is to respond quickly and effectively. The card issuer typically gives merchants a limited amount of time (about 30 days) to respond to a chargeback notification, so it is important to act quickly. Failing to respond in a timely manner can result in a default judgment in favor of the customer.?
- Invest in Evidence Collection Practices: Evidence collection is crucial in winning chargeback disputes. According to a study by ACI Worldwide, businesses that provide compelling evidence win 40% of disputes. Keeping detailed records of transactions, including customer information, purchase details, and shipping information, can help provide compelling evidence. When responding to a chargeback dispute, businesses must provide as much evidence as possible to support their case. This can include documentation of the transaction, customer communications, and evidence of delivery or completion of the service. Providing comprehensive evidence can increase the chances of winning the dispute. For example, an online casino may provide evidence of the customer's gameplay history, showing that they voluntarily participated in the games and acknowledged the terms and conditions. Similarly, an adult website may provide evidence of the customer's login and usage history, demonstrating that the customer had full access to the site and its content.
- Keep Processes Ready to Dispute Chargebacks: Disputing chargebacks is critical in winning disputes. According to a study by Verifi, businesses that dispute chargebacks win 59% of disputes. Responding to chargeback disputes within the given time frame is crucial to avoid losing the dispute by default.
- Work with Right Payment Solution Partners: Working with payment solutions is essential in preventing and winning chargeback disputes. Payment solutions can provide businesses with tools and resources to prevent and dispute chargebacks. A study by the Electronic Transactions Association found that businesses that work with payment processors that specialize in chargeback prevention and management have lower chargeback rates.
Chargeback disputes can kill businesses, but with effective strategies in place, businesses can prevent and win disputes.?
Real high-risk industry merchants who have successfully managed chargeback disputes include online gaming companies like Playtech and the adult industry company, Adam & Eve. These companies have implemented chargeback prevention strategies that have enabled them to win disputes and protect their business profits and reputation.
Providing excellent customer service, evidence collection, disputing chargebacks, and working with payment solutions are essential steps in the payments and chargeback industries. High-risk merchants need to factor in the risk of chargebacks in their business models and choose payment solutions that specialize in dealing with high-risk businesses.
