What You Need to Know About Chargeback Management Software in 2023

Chargeback management software combines several practical tools and strategies that can help recover revenue lost from chargebacks and reduce the ratio in the long run. It may be exactly what your company needs. Every merchant must select a professional chargeback software provider to meet their specific needs with a tailor-made business solution.

How Does Chargeback Management Work?

Managing chargebacks involves recovering lost revenue and preventing future occurrences through proper analysis. Proper chargeback management would leave your business and customers happy and satisfied, eventually leading to higher retention rates and increasing revenue.

There are five essential things your chargeback management software should do for your company:

• Monitor your rates: Your chargeback rate can determine and manage the success and longevity of your business. If it exceeds 1%, a merchant can be tagged “high risk” and charged an increased transaction fee for card payments, or even blacklisted.
• Prevent further issues: You should avoid chargebacks as much as possible. A great way to do this is to employ good prevention strategies, including monitoring transactions and user data and implementing better practices for customer satisfaction. Other tools to utilize are fraud screening and fraud scoring, which rates the information garnered through standing risk rules and helps you determine whether to accept or refuse them.
• Investigate payments to your company: It is necessary to store the data from transactions and user behavior histories in a log for future reference. You can use them to investigate and prevent repayment to your company.
• Resolving all ongoing disputes: Your preferred chargeback software should be able to get you out of conflicts before they escalate to forceful reimbursements. It should do this by providing you with all the necessary evidence.
• Analyze history: Train your management system using information from past cases. The system can improve your results by learning to avoid false positives and false negatives.

Software for Managing Chargebacks. What Is It?

Chargeback management software collects data on users, transactions, and disputes from several sources. It analyzes it to track and report accurate information on potential fraudsters and methods of reducing and winning chargebacks. Using this information and your preferences, the chargeback software can flag potential fraud, find patterns and trends in history, and collate compelling evidence.
Essentially, chargeback management software offers prevention and protection services. One chargeback tool is not enough; it is vital to have various tools to manage your business for the best results.

Does the Chargeback Management Software Really Work?

Using chargeback management software, you can prevent more instances that create this problem and protect your company from disputes that may progress to repayments. The chargeback software would save you money in the long run by fighting disputes on your behalf.

Approaches to Chargeback Software

The approaches to using essential Chargeback software include:

Software as a Service (SaaS)

This is essentially a self-service method that involves the management software your provider offers to you for a subscription offer. It is a super flexible and affordable approach that requires you to remain actively involved, critically analyzing and reporting on the merchant’s end.

Fully-Managed Approach

This involves outsourcing all aspects of your business chargeback management to a paid professional service. This is a better and more reliable alternative than juggling repayments by yourself because it reduces your workload. It is necessary to implement this approach using a reputable provider, providing you with detailed and precise information reporting in real-time for performance and ROI tracking.

Hybrid Option

Suppose you have some time on your hands or just want to learn more about the business and issues that may affect the revenue and sustainability of the company. A hybrid option entails taking on some parts of the chargeback management like SaaS for preventing chargebacks while outsourcing the rest like handling disputes involving fraud claims.

Types of Chargeback Software

There are three broad types of chargeback management software:

• Software for stopping actual fraud: these are implemented before the transaction is processed.
• Software for stopping chargeback fraud disputes: these prevent disputes from becoming flagged.
• Software for responding to disputes: these respond to conflicts from the bank by providing evidence.

Choosing Chargeback Management Software

When choosing chargeback management software, consider the following factors:

• Features: Look for software that offers essential features such as real-time monitoring of chargeback cases, automated dispute response generation, and comprehensive reporting. Additional features that are great to have include fraud detection, analytics, customer communication tools, and integration with payment gateways.
• Integration: Ensure that the software integrates seamlessly with your existing systems and platforms, such as your payment gateway, CRM, or e-commerce platform. This integration allows for smooth data flow and reduces manual work.
• Support: Check the level of support provided by the software provider. Look for accessible customer support channels, such as phone, email, or live chat, to address any questions or issues promptly. Reliable and responsive support is crucial for a smooth implementation and ongoing usage.
• Pricing: Consider the pricing structure and whether it aligns with your budget and expected return on investment. Some software providers offer tiered pricing based on usage or charge a flat fee. Evaluate the cost-effectiveness by considering the potential savings in chargeback costs.
• Reputation and Reviews: Research the software provider’s reputation in the industry. Look for user reviews and testimonials to gain insights into their reliability, performance, and customer satisfaction. 
• Scalability and Flexibility: Assess whether the software can accommodate your business’s growth and evolving needs. It should be able to handle increasing chargeback volumes and adapt to changing regulations or industry requirements.
• Security: Chargeback management software deals with sensitive customer and financial data. Ensure that the software provider adheres to strict security protocols and compliance standards, such as PCI DSS, to protect data integrity and confidentiality.
• User-Friendliness: A user-friendly and intuitive interface simplifies training and daily usage, enhancing productivity and efficiency.

Top-rated chargeback software is affordable, easy to use, loaded with helpful features, secure, and effortlessly integrates into your current systems. We have a solution that ticks all of these boxes!

The Most Effective Way to Deal with Chargebacks

Determine the Type of Fraud

The first step is to figure out what type of fraud you are dealing with—friendly, criminal, or merchant error. To do this, you need to analyze your data and the transaction histories.

Consider Chargeback Prevention Alerts

This chargeback tool alerts you when a customer files a transaction dispute with the bank. By resolving this immediately, you can reduce your ratios. You may also be able to halt the delivery process of goods if they are yet to arrive at the billing address.
You can receive these alerts if your chargeback management provider has partnerships with banks to give out this information.

Look for Hidden Issues

It is necessary to analyze the data generated from prevention alerts and chargebacks. You may find trends related to recurring issues within a region using this data. You may realize that the problem is your fault. Furthermore, you can solve the main problem by addressing the history, reducing future occurrences, and protecting your revenue.

Change Your Policies and Procedures

After looking at the data and discovering where you are lacking, you can adjust your policies. The reason for this is to find a balance that protects you and your customer from further disputes.

Determine if the Chargeback is Worth Fighting

First, you need to determine whether you can win the case and if fighting is worth your time. You should only fight friendly fraud cases because you are required to carry out due diligence and protect yourself and your customer from criminal fraud.
Even then, you should not fight all friendly fraud cases. Two times you can bother fighting are when the amount is more than the amount you’d spend going back and forth and if your evidence is compelling enough to win.

Get a Partner

Focus your energy on your business and leave disputes to a reputable company like Chargebackhit.

The Partner You Need

Chargeback prevention and protection can save you a lot of revenue when appropriately addressed. At Chargebackhit, our primary goal is to help you succeed in this endeavor while you focus on your business.
Grow your e-commerce business with our unified software that we tailor to meet your specific needs. Are you ready to make data-driven decisions for your business? Contact us for a free quote from a Chargebackhit now!