What is Chargeback Management Software?Got Chargebacks? There’s a SaaS Tool for That.
What Should Chargeback Management Software Help You Accomplish?
Salesforce first debuted the software-as-a-service (SaaS) model in the 1990s. Since then, software-based tools have found their way into practically every vertical.
From accounting software and payroll tools to customer relationship management (CRM) platforms and payment gateways, software powers virtually every business function. Software is even more mission-critical for merchants who do the majority of their business online. SaaS providers can power how customers interact with your storefront, browse inventory, create loyalty accounts, and complete purchases.
But, what when customers go rogue and file chargebacks, hoping to get something for free? Yep, there’s a SaaS for that, too. This is where chargeback management software comes in. In this chapter, we provide an overview of this type of software and talk about how it works.
Chargeback Management Software
In this guide, we take a look at what chargeback management software does and what types of solutions exist in the market. We’ll also talk about how to choose the right solution, what to expect during implementation, and whether a software-based approach is enough.
What is Chargeback Management Software?
- Chargeback Management Software
Chargeback management software can refer to any program or platform that assists merchants in the process of automating chargeback prevention and/or contesting invalid disputes.
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First, let’s clarify what we’re talking about here.
“Chargeback management software” is a broad term that can refer to services, single programs, or complete platforms. Different tools target different aspects of the dispute process; some more effectively than others. The end goal, however, is always to make managing chargebacks faster and easier.
Chargeback management software is meant to automate or streamline many of the most mundane tasks required for chargeback prevention and recovery. Because disputes can be complex, many tools are designed to focus on one particular aspect of chargeback management, as opposed to the entire process.
Can I Self-Manage Chargebacks?
Yes. It’s possible to handle your chargebacks in-house without any type of chargeback app. But, that assumes you don’t experience anything more than the occasional claim.
The chargeback process is not intuitive. The specific rules and requirements will differ depending on the card network, the acquirer, the issuer, or other factors. Managing customer claims requires significant investments of time and resources. You’ll also need ongoing education on the constant updates to regulations. Most merchants find that professional help is their best option.
Deciding to manage chargebacks in-house makes it even more imperative to identify the best chargeback management system for your business. That doesn’t necessarily mean you need to go with a fully managed solution, though, as we’ll see later.
Two Approaches to Chargeback Management Software: Self-Managed or Fully Managed
Looking at an overall chargeback management software strategy gives the merchant two basic options: a self-managed (SaaS) approach or a fully-managed service.
SaaS Solutions
SaaS (short for “software as a service”) is a self-service option. Your provider licenses software to you on a subscription basis. Many merchants, especially small- to mid-size businesses, like to explore this option first.
SaaS offers flexibility and a lower price point. However, it also demands ongoing involvement on your part. For example, you’ll have a full view of all your data. But, you’ll probably need to do your own case building if you want to respond to chargeback through representment.
Fully-Managed Service
With fully-managed service, you outsource all chargeback management activities to professionals. This can be a reliable alternative to juggling chargebacks in-house. It allows you to take disputes off your plate and focus on running your business.
The only downside is limited direct insight into the process. That’s why it is important to engage a provider who offers accurate, detailed, and user-friendly reporting to track performance and ROI.
Of course, you don’t necessarily have to choose between self-managed service or outsourcing. It’s possible to combine elements of both to better fit your needs.
For example, with a hybrid approach, you can deploy a self-management solution to more easily monitor data and spot trends. At the same time, you could opt to outsource dispute management for responding to invalid friendly fraud claims. You can work on preventing disputes while a third-party provider does the “heavy lifting” of building cases on your behalf.
