What if my Representment is Incorrectly Declined?
April 10, 2024
And what if a successful RDR or Ethoca submission gets charged back? Read on This blog breaks down the next steps.
Playing Offense with Chargebacks
Chargebacks and friendly fraud are the bane of all ISOs.
That’s because every time an ISO works with a Merchant, it’s their reputation on the line. That reputation is what drives new partnerships, reduces regulatory scrutiny and compliance costs, increases acquisition, decreases churn, and the list goes on.
Decreasing chargebacks can start with educating your Merchants on product descriptors, smoothing out pricing information, developing great customer service, and using good credit card processing protocols. But even with correct systems in place, there is no still way to completely eradicate the chances of a dispute happening.
And once those disputes start streaming in, it can be a matter of months before payment problems lead to pricey compliance breeches and eventual churn.
Current State of Fighting Chargebacks
Managing chargebacks is considered a game of defense.
Merchants are waiting around until the chargeback happens. Then once it happens, they rush to reverse the dispute.
Though different from ISO-to-ISO and Merchant-to-Merchant, contractional obligations can make using a chargeback service mandatory. And if not obligated, voluntary use of a chargeback service can make sense once disputes start shipping away at the bottom-line or require specialized attention. But these services all cost money, and they aren’t always helping the Merchant decrease chargeback volume.
Third-party services will answer 100% of chargebacks—but at a cost. Merchants pay cash upfront to enroll, then spend money for every fought chargeback. These services can also conduct business behind closed doors. This means Merchants may never see the representments being filed. Our own deep experience tells us the Merchant knows their business best, and when those chargebacks occur, they can be investigated and potentially fixed.
Representment generators, on the other hand, let Merchants fill out and file their own representments. Each tool is slightly different, but functionally similar—the Merchant fills out fields, attaches evidence, and submits for processor review. Unlike third-party services, the Merchant needs to diligently collect supporting evidence and understand what their processor(s) deems important.
Problems Arise When Merchants Play Defense
Responding to problems without understanding the root cause is a poor strategy.
Third-party services and representment generators might work fine (or seem so on the surface). They can certainly give back power to Merchants, making it quicker and easier to respond to chargebacks—something that Merchants aren’t always equipped to handle by themselves. They can make it possible to fight an increasing volume of chargebacks while knocking back down compliance thresholds.
A Merchant may look healthier for the short-term. They might be addressing and winning chargebacks, and they might be staying compliant. But brewing problems can lead to increased disputes that go unnoticed or untouched until too late. Those increasing disputes coupled with compiled fees from chargeback tools stack up quickly. These are all risks that can eventually hit an ISO’s bottom-line.
Using Data Play Offense
Making sense of what’s going on behind the scenes can save your Merchants’ life. It’s the other half of the chargeback problem.
Playing offense starts and ends with the data, and only Slyce360 can give Merchants and their Processors the tools to play a winning offense:
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Chargeback tolerance violations – constantly changing Acquirer and Card Association thresholds are tracked in real-time. Daily alerts signal to the user potential problems using Merchant chargeback and fraud data. System generated insights help navigate Merchants away from the risks and potential compliance tripwires
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Friendly fraud risks – Maybe buyer’s remorse, maybe a child using their parent’s card, or even a cardholder forgetting about a purchase. Regardless, every chargeback is counted the same towards a chargeback tolerance threshold. Slyce360 track trends to help make sense of friendly fraud
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Source of threat information – Slyce360 ingests payments data, and cleanly presents it in a configurable dashboard. Cleaning up and presenting the data means Merchants can deep dive into trouble spots, all in a single easy-to-use portal
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Monitor disputes and dispute mitigation efforts – Merchants can analyze all their dispute mitigation efforts through Slyce360. Get insight into duplicate or ineffective coverage, double refunds, or misapplied dispute mitigations
What Does That mean?
ISOs can up to 2x their Merchants’ life with Slyce360.
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