Chargebacks are a common problem for merchants operating in the eCommerce space. And this problem gets bigger with every passing year. In our guest feature, we explained that, although chargebacks are the banking industry’s primary tool for recovering revenue lost to fraud or abuse, customers are empowered to bypass merchants in pursuit of a refund…even when they may not be entitled to one.
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According to the article, global chargeback volume may reach $117.47 billion by 2023. Most of those losses will not be tied to the cost of the initial sale. Accounting for chargeback fees and other related revenue drains, the average chargeback will ultimately cost merchants $3.60 for every $1 in sales value.
Perhaps the leading cause of these staggering figures is the antiquated chargeback process. It’s governed by rules that are often unevenly enforced.
“A chargeback should only be reserved for instances in which the merchant couldn’t be reached for a refund, or they flatly refuse to provide a refund for a damaged or defective piece of merchandise,” the piece mentions. “Working with the merchant can be a more collaborative process that will lead to a faster resolution.”
