Chargebacks911 Founder Monica Eaton was featured in a recent FinTech Nexus News article that seeks to explain why, contrary to many consumers’ opinions, chargebacks are anything but “simple” for retailers.
Fintech Nexus News was officially founded in 2016 by Peter Renton after a merger with its sister company, LendIt. The site is a daily news service covering every important story in fintech every day, including in-depth editorials and popular financial podcasts.
While adding obstacles for consumers is never the answer, older dispute practices did, at least, add a bit of useful friction to the process. Now that disputes are easy to initiate, retailers are seeing a surge in activity. “The problem is, whenever a chargeback happens, the merchant, the retailer, is forced to pay for that refund pretty much immediately,” Eaton sas.
“If you want to file a chargeback within your bank with Chase, or you bank with Capital One, or Wells Fargo, then all you do is go to the app on your phone, and you just click a button, and it says would you like just to do this, and you say yes, and that’s it. You refresh your screen and will see a refund for that amount.”
One chargeback can be bad enough. Multiple chargebacks, however, can cause a cascade of negative consequences for retailers.
“If I’m a retailer and I process your credit card, I’m sending that information to a bank with an agreement with the card networks…And those card networks are like Equifax and Experian, where they manage credit reports for merchants based on chargebacks. Not only does the retailer suffer this massive consequence, but also the banks. The card networks are the only organizations that make money in this equation,” Monica warns.
