Using Automation to Manage Dispute Resolution

By October 5, 2016 February 14th, 2018 Blog

The ability for any business to accept credit cards is critical to being competitive, and achieving long-term success. However, managing the intricate and complicated system is a time consuming process that can distract business owners from more important activities. One of the issues faced by all credit card businesses is the potential for chargebacks.

Chargebacks occur when a consumer disputes a credit card charge on their monthly credit card statement. They contact their bank and state that the charge is invalid, and request their money be refunded. This can happen for several reasons, such as the consumer not feeling that they got the proper merchandise, or claiming that they weren’t even at that merchant’s location to make a purchase. At that point, the chargeback process begins for the merchant.

The Effect of Time on the Chargeback Process

When a bank accepts the chargeback request, their first action is to alert the card issuer, who then notifies the processor, who issues some sort of communication to the merchant. That communication tells the merchant that one of their customers has disputed a charge that was submitted for payment. At that point, the transaction is frozen—or even sometimes temporarily reversed by the card association—and a fee from the processor already charged, and the merchant won’t get paid or have that chargeback reversed until the transaction is verified.

When a merchant is notified of a chargeback, there’s always a timeline imposed. To successfully resolve a chargeback, the merchant must go back through their records and retrieve the signed credit card receipt, and any other supporting documentation that the credit card company requests, and submit them for consideration. All documentation must be submitted before the deadline imposed by the credit card company. If the deadline is missed, the chargeback stands, and the merchant loses the transaction and gets a chargeback fee imposed on them.

The issue of time becomes a problem for larger merchants with more than one location, or a high transaction volume. When a large merchant deals with several chargebacks per day, the time associated with dealing with the details of each can be an onerous task, especially with the necessity of meeting deadlines and providing unique documentation for each case. Some large enterprises have teams or departments dedicated to contesting and handling every dispute that comes through the door, relying on manual or semi-automated processes to help them manage and report on these effectively.

Taking Time Out of the Equation

The imposition of a time deadline in responding to a chargeback request is a major factor in merchants’ success rates in dealing with chargebacks. Chargeback notices often arrive via regular mail or in a batch file, if you’re a larger enterprise, and it’s easy to see how that notice could spend a day or two making its way to the person, or team, inside the company who can contest chargebacks.

Red Carpet Software: Merchant Dashboard effectively negates the slow-mail notice for chargeback requests. With Active Alerts, a notice is triggered in the system that informs the merchant of a chargeback up to three days before a mailed notice is even sent to the merchant.

When Red Carpet Software: Merchant Dashboard is alerted to a chargeback event, the system proactively begins the dispute process. The system automatically archives all point of sale documents in a data warehouse that can be accessed easily at any time. With the merchant POS integration in place, the system can retrieve the needed receipts and get them ready to be paired with a dispute fulfillment form for the processor. The entire dispute process can be handled electronically, quickly, and easily, automating the chargeback resolution and fulfillment process entirely.

Bypassing the usual time sensitive process inherent in the chargeback system is a major competitive advantage for merchants. Red Carpet Software: Merchant Dashboard leverages time as an asset, rather than a liability in the chargeback process. In addition to making the chargeback process faster and more efficient, it also allows the merchant to gain critical insights into every location of their business, down to the individual transaction level, making it one of the most powerful chargeback automation software tools on the market today.

Maximize the Potential in Every Transaction

There are other chargeback automation software tools available today, but none combine the power of versatility of Red Carpet Software: Merchant Dashboard. Neither do they include Reconciliation Automation, Reporting and Analytics and Cost Analysis across all your transaction workflow points.

Red Carpet Software: Merchant Dashboard aggregates all chargeback data (along with all other critical data) and shows where chargebacks occur, and why. Insights gained from this information could include the need to enhance transaction security measures, such as adding zip code verification, deeper staff training, or other methods of increasing the transactional success rate. This chargeback automation software can track your success rates with chargebacks over time, a factor that can inform other strategic business decisions.

Red Carpet Software: Merchant Dashboard provides a high-level view of all business, shows alerts when needed, and makes all the details of individual transactions easily accessible. Having a chargeback automation and reporting solution like Red Carpet Software: Merchant Dashboard will help manage the time consuming process of dealing with chargebacks in a way that can have a positive impact on the business.