The invisible tax on traders: time spent dealing with disputes

Than that Payments Companies are faced with the need to refine their dispute resolution strategies to mitigate the impact of change Chargebacks.

As the cost and frequency of chargebacks increase, a PYMNTS Secret Service report,”Recovering Revenue: A Merchant’s Guide to Automated Chargeback Management”, in collaboration with American Expressshows how retailers need to introduce solutions that don’t just improve their finances Health, but also streamline operational processes.

Chargeback challenge for retailers

Chargebacks become challenging for merchants and impact their financial stability and brand reputation. According to the report, chargebacks cost merchants approximately $54.5 billion annually and include more than just lost revenue. The complexity of chargebacks ranges from genuine consumer disputes to cases of friendly fraud where customers initiate chargebacks on transactions they have made authorized.

The travel, retail and software industries are particularly vulnerable to chargeback disputes, incurring an average cost of $76 per dispute. 76 percent of global e-commerce chargeback managers report an increase in chargeback rates compared to last year, highlighting the inadequacies of existing transaction dispute processes. The burden of these disputes disproportionately affects small businesses, with nearly a third of U.S. small businesses experiencing frequent chargebacks.

More than half this Businesses are realizing the negative impact chargebacks have on their operations. Traditional dispute resolution methods that rely on communication and paperwork place additional strain on resources and distract from core functions.

Automation to resolve chargebacks

To counteract the rising tide of chargebacks, many merchants are turning to automated dispute resolution tools. These technologies streamline processes, increase efficiency and deliver better results both Companies and their customers.

After According to the report, merchants that use automated tools to resolve chargebacks could save up to 84% of the time traditionally spent on dispute resolution management. The global chargeback management software market is expected to grow at a compound annual growth rate (CAGR) of 16%, reflecting merchants’ awareness of the benefits of automation.

Industries that have quickly adopted these technologies, such as gaming and apparel, report higher success rates in chargeback disputes, demonstrating the tangible results of automated solutions.

Automated tools don’t just speed recovery Medium, but also reduce the administrative burden. Early adopters of these technologies are already seeing improved financial recovery, highlighting the potential of a data-driven dispute resolution process to improve overall outcomes.

Meet consumer expectations

In today’s digital economy, consumers expect seamless experiences across all interactions, including dispute resolution. Merchants must implement strategies that leverage advanced automated tools to meet these expectations and drive customer loyalty.

Speed ​​and convenience are top priority with 41% of consumers preferring to use it Banking Apps To Dispute transactions directly with your card issuer. About 36% of consumers place high value the opportunity to check their dispute status Real time via an app. By adopting automated dispute resolution processes, merchants can efficiently resolve genuine disputes while preventing misuse of the chargeback system.

With 75% of consumers viewing disputes as an alternative to refunds, a streamlined, user-friendly dispute resolution process is essential. By ensuring high levels of satisfaction with solution methods, retailers can increase customer loyalty. Advanced automated systems help accurately distinguish between first- and third-party fraud, prevent unnecessary chargebacks, and build consumer trust.

For effective chargeback management, merchants must begin with an audit of current processes to identify inefficiencies. Working with payment processors can increase fraud Recognition, At the same time, investing in advanced tools improves outcomes through real-time detection and automated evidence collection.

Redesigning the customer dispute experience with a mobile-first approach increases satisfaction, Determination A feedback loop enables the strategy to be continuously developed. These strategies support profitability and customer retention.