How to: Win a Chargeback Dispute

45 percent of businesses pay to prevent chargebacks but only 21 percent of those businesses have strategies to win a chargeback dispute.

Since chargebacks are a 40 billion dollar problem in eCommerce, doing nothing is a bad idea. The idea that chargebacks are a lost cause is a mistake.

Why is this a mistake? Payment processors give businesses a chance to win a chargeback. If the business has verified customer data, they will win chargeback disputes.

How to win a chargeback dispute:  

1. Have first-time customers comply with a verification process.
2. Online business is a great way to grow but first-time customers are risky.
3. Customer verification is effective because it holds new customers accountable for their purchase.
4. When you verify customers, you have the necessary proof to win the chargeback dispute. 
5. Once the new customer is verified, companies like Token of Trust mark them as safe for future transactions. 

How to verify customers, according to payment processors:

1. Verify that your customer is providing an accurate: First Name, Last Name, Home Address and Date of Birth. Third party databases are able to corroborate and verify this information in seconds.
2. Require customers to scan their Drivers License and take a Selfie. During a chargeback dispute with Stripe or Paypal, they will request that your business provides the customer’s Drivers License + Selfie. 

When you’re selling online, card-not-present fraud (48%) and friendly fraud (28%) are the chargebacks you will see the most.

Why will card-not-present fraud occur?

1. People steal credit card information.
2. When it is reported that a business accepted stolen credit card information, the credit card owner will receive reimbursement from the issuing bank. 
3. Before the business is held accountable, they will have a chance to provide evidence to the issuing bank. 
4. If your business verified the customer’s identity with Token of Trust, you will provide verified customer data to the bank to get your money back.
5. This is the case for 48 percent of chargebacks.

Why will friendly fraud occur?

1. Card owners will fight legitimate charges to their credit cards.
2. Without contacting the business, customers will push the bank to force a refund under the pretense that the business made an error.
3. If your business verified the customer’s identity with Token of Trust, you will provide verified customer data to the bank to get your money back.
4. This is the case for 28 percent of chargebacks. 

Don’t lose money to chargebacks: 

Verifying first-time customers means that you won’t fall victim to expensive chargebacks. With a verification process in place, eCommerce managers have the customer data they need to win chargeback disputes.

Token of Trust’s mission is to protect consumer data while providing online businesses the data they need to make informed decisions. Anyone can partner with Token of Trust and use our identity verification tools. Get started here.

All statistics referenced in this article were gathered from, The State of Chargebacks: 2018 Report by Kount. They interviewed 1,000 online businesses to better understand the state of chargebacks.