These 5 Things Happen When You Fight Chargebacks

If you’ve chosen not to fight chargebacks, you have your reasons why. You might have weighed the pros against the cons and decided it just wasn’t worth it to fight.

But did you have all the facts when you made your decision?

Maybe not.

There are five extremely valuable benefits of fighting chargebacks — but very few people are aware of the hidden potential.

Take a look at what happens when you fight chargebacks and what you miss out on if you don’t.

You recover lost revenue.

We’ll start with the most well-known benefit: revenue recovery.

Every time you receive a chargeback, the revenue you earned from the sale is withdrawn from your bank account. But if you fight the chargeback and win, you can recover that money.

Obviously, more revenue is great! But some merchants question whether the effort needed to win is worth it.

This is a valid concern. It is possible to have a negative return on your investment when fighting chargebacks. You could easily spend more than you are able to recover.

But with the right strategies, techniques, and expertise, you can recover the maximum amount of revenue possible with a substantial ROI.

If you’ve tried fighting chargebacks and didn’t achieve the results you were hoping for, it’s time to try again.

You could pay less in fees.

Both Visa^® and Mastercard^® have chargeback monitoring programs. If you are enrolled in one of these programs, you’ll likely have to pay additional fees for each chargeback you receive.

However, if you fight and win a chargeback, it might not be included in the count. Therefore, fighting could reduce your costs. Not only would chargeback responses recover lost revenue, they could also save you thousands in additional fees.

You unearth valuable data.

Each chargeback you receive contains a ton of valuable information that can help you understand your business better.

If you let your chargeback notices pile up on your desk and just accept them as a cost of doing business, you miss out on this valuable insight.

But if you collect, compile, and analyze the available data, you can figure out why chargebacks are happening and what you need to do to prevent disputes in the future.

Merchants have shared countless stories with us about how analyzing their chargeback data has helped them discover the underlying reason for disputes and solve problems at their source.

You avoid fines and penalties.

A few years back, Visa launched an initiative (call Visa Claims Resolution or VCR) to modernize the dispute process. Part of the updates included new fines for dispute responses.

If you don’t respond to a dispute within the given time period, you’ll have to pay a fine. The longer you wait, the more you’ll pay. If you don’t respond at all, you’ll be fined the maximum amount.

However, if you do respond, you can avoid these extra expenses.

Automation and technology can help you meet the short submission deadlines and minimize costs. Even if you don’t want to actually fight chargebacks, you should at least respond to accept liability.

You prove the legitimacy of your business.

Your bank carefully monitors risk exposure. Could your business negatively impact theirs?

There are several metrics the bank uses to gauge how risky it is to work with you. The most widely-known metric is the chargeback-to-transaction ratio. However, there are other risk indicators too.

Another metric that banks actively monitor is the percent of chargebacks fought.

If you aren’t fighting chargebacks, the bank is going to wonder why. The authenticity of your business will be called into question because legitimate operations would want to collect money that was rightfully theirs.

Therefore, fighting chargebacks helps establish your credibility and boosts the overall reputation of your business.