Chargebacks911® COO Monica Eaton’s New Guest Feature for Payway Blog
There are dozens of different chargeback reason codes signifying possible justifications for chargebacks. But, as Chargebacks911 COO Monica Eaton explains in a new guest feature for the Payway Blog, we can trace all chargebacks to one of just three fundamental sources.
Payway offers a cloud-based payment solution to help streamline and reduce the costs associated with transaction processing for card-not-present businesses. Their story began more than three decades ago, providing support specifically for the subscription and recurring revenue business.
Chargebacks are a serious threat to merchants because each translates to lost revenue, merchandise, and other threats. But, as Monica explains, it’s incredibly hard to address this problem based simply on chargeback reason codes. “Unfortunately, it’s not that simple, because not all chargebacks are legitimate,” she says. “It’s a problem that can’t be fixed by conventional fraud management tactics, or by looking at chargeback reason codes.”
The truth is that we can trace all chargebacks to one of three basic sources: merchant error, criminal fraud, and friendly fraud. The majority of chargebacks will fall into that third category.
“You’d probably assume that most chargebacks occur as a result of criminal activity. However, data from Chargebacks911® suggests that less than 10% of all chargebacks are tied to criminal fraud. In reality, between 60-80% of all disputes are potential cases of friendly fraud.”
