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Data for today’s episode is provided by Mercator Advisory Group’s report – Merchant Chargebacks Are on the Rise Due to Friendly Fraud.”
Managing a single chargeback is an 8 step process between 4 parties:
- The chargeback process begins when a cardholder files a dispute with their card’s issuing bank (1)
- Then the issuing bank passes the dispute to acquirer (2), and acquirer passes to merchant (3)
- If the merchant contests the dispute, they send proof back to the acquirer (4)
- The acquiring bank passes the merchant’s proof back to the issuer (5) who decides for or against the merchant (6)
- If the issuing bank decides against the merchant, the merchant can appeal (7)
- If the issuing bank decides with the merchant, cardholder can provide further proof and the process restarts (8)
- The best defense against chargebacks is clear and concise records of customer purchase transactions
About this report
Merchants find themselves wrestling with the chargeback process, which is triggered when consumers dispute a purchase transaction, mostly on e-commerce sales. Increasingly, friendly fraud has also become a direct cause of merchant chargebacks. This report delves into chargeback reasons and implications as well as vendors of chargeback services that have emerged to provide solutions for merchants.
A new research report from Mercator Advisory Group, Merchant Chargebacks Are on the Rise Due to Friendly Fraud assesses the challenges and preventive solutions for this increasing problem that affects merchants of all sizes across vertical markets.
“Merchants are incurring a major pain point dealing with consumer-disputed sales transactions that can lead to chargebacks. This can mean merchants lose not only the sales revenue but also the merchandise and related overhead costs as well,” commented Raymond Pucci, Director, Merchant Services at Mercator Advisory Group, the author of this report.
This report is 14 pages long and has 2 exhibits.
Companies mentioned in this report: ACI Worldwide, American Express, Authorize.Net, BlueSnap, Braintree, CardinalCommerce, Chargeback, Chargebacks911, Chargeback Gurus, Chargehound, CyberSource, Discover, Ethoca, Federal Reserve Board, Lexis-Nexis, Mastercard, Midigator, PayPal, Stripe, Verifi, and Visa.