Debt Collection for Chargebacks and eCommerce

By on November 15th, 2018 in Industry Insights
TrueAccord Blog


Chargebacks are frustrating. Debt collection for chargebacks can help.

Chargebacks are a part of doing business, but they’re also incredibly frustrating. It’s a slow, disjointed process that can hit 1-2% of your GMV. Chargebacks create multiple issues.

  • Chargebacks take time to get to you. A consumer can take months to charge back and while the majority of chargebacks come in in the first 30-60 days, not all of them do. You may lost revenue you thought you had several months after you book it.
  • Chargeback dispute is manual, slow, and often ineffective. Chargeback often arrive by snail mail with very little time to respond, and evidence collection and submission is tedious.
  • Many chargebacks are caused by buyer’s remorse and abuse of credit association rules. As high as 30% of eCommerce chargebacks may be the result of remorse, spouses using the other’s card without their knowledge, or just friendly fraud.

Many businesses start their own payment operations teams, focusing on detection and prevention. There’s a lot you can do in detecting fraudulent and abusive behavior in advance. When you don’t, and representation doesn’t work, debt collection for chargebacks is a tool you must consider.

Can debt collection for chargebacks really help?

Debt collection for chargebacks is an effective complimentary process, working hand in hand with representation to increase your recovery rate. The customer is liable for paying you based on your terms of service, even if you can’t charge their card.  Debt collection, especially with a digital-first solution, will improve your chances to recover and reduce your risk of alienating your customers. Clearing out the reason for their chargeback might help you win them back as customers.

You must approach these customers with the right mind set. TrueAccord is exceptionally good at handling disputes, not only blindly go after the money. By listening to your customer, we are able to discern with greater accuracy whether the chargeback was a result of fraud or something else. We lead the customer into paying back what they owe, telling us their story and giving you feedback, and getting them back to paying status. It’s a win all around.

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