August 30, 2010 | Authored by: Vindicia Team
The Hidden Benefits of Putting Up a Fight
Online businesses often ask us about the value of fighting chargebacks.
After all, it’s a relatively small percentage of total revenue (less than one percent if you’re following the rules). There are, however, several reasons to put up a fight that may not be readily apparent.
There’s an old joke about two guys camping. They hear a bear outside the tent. One guy starts panicking, while the other calmly puts on his tennis shoes. The first guys says “what are you thinking? You can’t outrun a bear!” The second guy replies “I don’t have to outrun the bear. I just have to outrun you.”
Your site doesn’t have to be bullet proof, and you don’t want to make it impossible for someone to get their money back. However, you do want to make your site a less attractive fraud target compared to your peers. The web is littered with blog entries and Facebook postings of people telling how to scam a particular merchant. If you are an easy target, people share that information, and others will victimize your business. If you take a harder line, though, the fraudsters will look for an easier target.
Analysis of your credit card traffic will also show that you may benefit from educating the banks. Most merchants see that a handful of banks may make up a reasonable percentage of their transactions. Our analysis shows a drop in chargebacks received from some of these particular banks as merchants fight chargebacks over time.
Over the first year of fighting chargebacks, Vindicia clients see up to a 1/3 reduction in the total chargeback volume they receive. While some might opt to only fight specific types of chargebacks, we have repeatedly shown that our merchants benefit from aggressively fighting chargebacks across the board.
Which billing platform is right for B2C subscriptions?Download