Debt Collection for Chargebacks – Why It Can Be the Right Decision for You

By on November 29th, 2018 in Industry Insights
TrueAccord Blog

All business operate with some form of debt. However, for the business to be kept afloat, one has to ensure that proper payment is made for products or services rendered in due time. But the downside is that some customers are not reliable and as honest as you may think. Also, errors occur in the course of business, leading to undercharging, overcharging or wrongful charging. As a business owner, you understand all these, but one thing is always a miss – time. Debt Collection for Chargebacks can help.

You cannot attend to the core functions of your business and at the same time keep tabs with debtors. In recent time, chargebacks have been a headache to most merchants. This is true especially with regard to chargebacks which are not genuine, the result of friendly fraud or buyer’s remorse. Many merchants have resorted to using debt collection agencies especially when the chargeback is unfounded or is as a result of consumer whims.

Well, debt collection for chargebacks could be the best decision that you have ever made. It leaves you ample time to focus on other productive activities that develop your business. Let’s consider some vital points on how debt collection for chargebacks is useful in the long run.

Legal Protection

Merchants have the due backing in law to engage in debt collection on chargebacks, even ones where disputes failed. So, as a merchant, you have no cause for worry when you send chargebacks to debt collections, as long as you choose the right partner. These agencies have a firm grasp of the law governing the debt collection industry. They also have an excellent grounding on the consumer acts (such as the FDCPA, TCPA, FCRA, etc.); thus they are in a better position to engage consumers. In the long run, you end up eliminating the risk that is associated with debt collection on your own. It can get litigious quite fast.


As earlier mentioned, as a merchant, your business has limited time against unlimited wants. You can’t address each and every issue that comes your way. It then makes sense to outsource some functions such as debt collection for chargebacks. Debt collection agencies have custom programs that are tailor-made to suit each business owner, and charge less than it would cost to hire an in-house A/R specialist for most busiensses. They are flexible as they are the ones who would fit into your business model as opposed to the converse.

Fast Payments and Asset Recovery through Debt Collection for Chargebacks

At times, the mere mention of sending a chargeback to collections pushes consumers to act. This is true especially when they know their chargeback was filed on flimsy grounds. They know that they will be chased down and they will have to pay up eventually. They may opt to settle the debt altogether instead of enduring a debt collection process, even if a pleasant one. When your consumers know that you enlist debt collection services as a means of debt recovery, they will always strive to settle their bills on time, and more often. You will get to focus on other important things such as developing your business.

Debt Collection for Chargebacks is a Form of Customer Service

Not all debt that a business accrues is rightfully theirs. Chargebacks could be as a result of errors. Rationally, a consumer is not obligated to pay up just because an invoice is sent to them. An invoice can have errors, and sometimes chargebacks or simple non-payment are inevitable when they see these errors. When you engage a debt collection agency, they’ll have to verify and validate the chargeback in order to swing into action. When they establish that the error was on your side, they will drop the claim and protect your brand and perception by consumers.

In a way, this could be a form of customer service. In essence, you are actually telling the customer that you are one who verifies claims to establish their validity. You are telling them that you are professional and that you want to retain the goodwill that you have with them. This is even enhanced when the debt collection agency is one that approaches matters in a communicative and objective manner. Therefore, debt collection isn’t about threats and negativity.

Minimal Costs

Sending chargebacks to collections is not only a viable option but also a cost-effective one. For most of the debt collection agencies, payment is typically pegged on a relatively small fee and commissions on the total amount recovered. This makes them a cost-effective option. And what’s more? They know their stuff, and you are guaranteed to recover all those wrongful chargebacks.

With the above points being highlighted, we understand that chargebacks are a common feature in these hard economic times. However, as a merchant, you shouldn’t be victimized for unfounded reasons. Debt collections for chargebacks should increase your debt recovery efforts. Use it today as one of your debt recovery strategies, and you are sure of reaping immense benefits.

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