Have you noticed an uptick in chargebacks? We are seeing many of our merchants who are experiencing chargebacks for the very first time after decades of business experience. As we enter the fourth month of 2022, our Remedy Payment Solutions chargeback concierge team has seen a huge surge in chargebacks. This is a phenomenon taking place throughout the world. In fact, it’s so prevalent that our industry has named it, The Chargeback Surge. In 2021, Remedy Payment Solutions helped moving and storage providers fight over 3,500 chargebacks. We’ve seen it all and we thoroughly enjoy helping our clients win customer disputes.
What’s Causing the Surge?
Surprisingly, we believe this is a side effect of the COVID-19 pandemic as the surge rates coincide with life changes that occurred in March of 2020 when our lives shifted in one way or another. The lockdown became a catalyst for digital commerce. From neighborhood restaurants who adapted to online ordering and curbside pickups to retail merchants who quickly embraced internet sales and added eCommerce to their websites. With the surge in eCommerce comes the surge in chargebacks. Americans are spending more time online and in a recent survey, six out of every ten consumers reported making at least two eCommerce purchases per month.
The booming housing markets across the country have played a major role in the increase of chargebacks for moving and storage providers. The booming markets have increased the demand for moving and storage services while at the same time the industry is battling a driver and labor shortage. The aforementioned has contributed to an increase in claims, delivery delays, and fraudulent claims ultimately increasing the number of credit card transactions disputed by cardholders.
American merchants are not alone in seeing the chargeback surge. Card brands such as Visa and MasterCard report chargeback increases from three continents. 24% of all online shoppers in the United States, Australia and the United Kingdom have filed a dispute against a merchant in the past 12 months. 12% of this same group is initiating chargebacks at least once monthly. How Big is the Problem? It’s big! 48% of all merchants in the previously mentioned continents have experienced a 50% increase in chargebacks filed against them in the past 20 months. If you lose a chargeback, you lose the funds and you are left without the product or the time you spent working on a paid project that you will never get back. Every chargeback defense means someone must gather the supporting documentation and take the time to respond to the chargeback notice and track it to the resolution.
At Remedy Payment Solutions, we understand how cumbersome, emotional, and time consuming it can be to respond to a customer dispute. We offer a concierge chargeback service to all our clients at no additional cost to assist in alleviating the stress and time a business has to invest in responding to chargebacks. We help well over 1,000 moving and storage providers respond to customer disputes and we’ve been winning at a ratio close to 90% when the client has signed supporting documentation. We’re willing to help evaluate your bill of ladings, estimates, credit card authorization forms, terms and conditions, valuation coverages, and any documents you utilize with your clients to help identify any areas of vulnerability.
Reasons for Chargebacks
More than 80% of all consumers have shopped online since March 2020. 54% of those shoppers report they are shopping online more than they did before the pandemic began. The online shopping shift includes making more household product purchases. Nearly 25% of those who have shifted to online shopping have disputed at least one charge in the past 12 months. Service errors such as shipping mistakes, billing mishaps or late product arrivals are the most common reason for initiating disputes. In fact, service errors account for the bulk of all chargebacks while only 27% are related to fraudulent activity. Fraud disputes are slightly lower than disputes involving product confusion or misrepresentation which account for 39% of all chargebacks. Perhaps this is because we can’t examine a product ordered online until it arrives. Another increasing reason for chargebacks is known as a “friendly fraud” incident. Kids are also spending more time online and making purchases and placing orders unbeknownst to their parents who then file dispute charges that the purchase of virtual game time was unauthorized. There are more disputes involving friendly fraud than there are of legitimate fraudulent purchases.
We see the aforementioned trends in the moving and storage industry as well. The majority of chargebacks our team is seeing relate to damages that occur during a job, claims of fraud, and claims services were not provided as agreed. We can help you combat these claims by ensuring your bill of lading and documentation have the necessary verbiage. We can’t guarantee we’ll win a chargeback, but we can definitely increase your chances.
Working the System
Consumers have become more educated to initiating chargebacks against merchants when they don’t get their way. Consumers are learning trends that help them win chargebacks, so it’s more important than ever to make sure your documentation of your jobs are on point. A typical example includes a customer wanting to be fully reimbursed for a used item that was damaged during a move. When the merchant (moving company) asks the customer to go through the claims process per the agreed upon valuation coverage and the cardholder refuses, so they initiate a dispute with their credit card provider.
A dispute like this can easily be won in the merchant’s favor with the right terms and conditions outlined on the bill of lading and estimate (must be signed by the cardholder). The merchant must prove that the customer was adequately informed of the valuation coverage and claims process. When customers are told they can’t have a refund and must submit a claim, they file disputes to get their money back. These can be won on a case-by-case basis based upon details. Always Respond! While chargebacks are disheartening for a merchant to receive, you should respond to each one. Your hard-earned profits are immediately sucked out of your bank account. You have an opportunity to explain your side and gain it back. If you take too long to respond, you could lose the dispute simply for not responding in time. If you fail to respond at all, it can be considered a black mark against your business. Too many unanswered chargeback notices can get your business placed on a blacklist that ensures you will be unable to accept credit cards through any credit card processor. Remedy Payment Solutions provides full support for our merchants battling chargebacks. If you receive a chargeback notice and need help, give us a call. If your Merchant Services Provider doesn’t provide chargeback assistance, make the switch to Remedy Payment Solutions and let us put some money back in your pocket. We are a provide unrivaled customer support and service to moving and storage providers across the country.
At Remedy, we will work hand in hand with your business as we present your case to the funding bank. We’re here to fight for you and to make sure you are treated fairly.
Please, let us help keep your account in good standing!
Remedy Payment Solutions is powered by Chosen Payments whom is a registered ISO and FSP of Wells Fargo Bank, N.A., Concord, CA and BBVA USA, Birmingham, AL., and Elavon, Inc., N.A., Atlanta, GA and Evolve Bank & Trust; Memphis, TN., and Merrick Bank, N.A., Draper, UT.