Chargebacks911® COO’s Insights on Net Recovery Rates
Monica Eaton, Co-Founder and COO of Chargebacks911, recently contributed a new guest feature to leading industry publication CFO Dive. In her piece, Monica advises merchants that better chargeback data can improve your net recovery rate.
CFO Dive is an outlet operated by Industry Dive, providing in-depth journalism and insight into the most impactful news and trends shaping finance. Their newsletters and website cover topics such as financial reporting, compliance, technology, risk management, leadership, and more.
Monica points out that companies are leaving money on the table by writing off too many chargebacks. It’s important to diagnose chargeback problems, identify sources and deploy solutions. Before you can do that, however, you need to have data about the disputes being filed against you.
There are many key performance indicators that can influence your strategy: order abandonment, refund requests, manual review rate, decline rate, false decline rate and overall fraud-to-transaction ratio. However, there’s one KPI that stands out in terms of direct relevance to your chargeback strategy: net recovery rate.
“Your chargeback win rate looks at successful representments as a portion of overall transactions represented. In contrast, your net recovery rate looks at successful representments as a portion of total chargebacks issued,” Monica says.
“It’s important to distinguish between these two figures. Your win rate indicates your success at fighting chargebacks. Your net recovery rate, however, can help you figure out if you’re misidentifying chargebacks, and accepting losses that could be recovered.”