“The chargeback problem, including friendly fraud, has been the neglected bane of the merchant world.”
Merchants have long been the victims of fraud and even ‘friendly-fraud’ in the form of chargebacks, but it hasn’t necessarily been a forefront concern until now. Monica Eaton-Cardone, CIO of Global Risk Technologies and a specialist in Chargeback Compliance™, has recently analysed a study that reports how hiring and training personnel costs represent up to 30 percent of fraud and chargeback spending for merchants.
The study, The Impact of Fraud and Chargeback Management on Operations, produced by Javelin Strategy & Research on behalf of Vesta Corporation, explores the financial costs of tackling the problem of fraud and chargebacks alone, rather than enlisting the help of third-party providers. It reveals that apportioning financial resources to manage fraud and chargeback challenges actually ‘diverts funds from investing in a merchant’s core competency: selling goods and services’ – which then directly impacts on the ability of merchants to successfully grow their business.
“The chargeback problem, including friendly fraud, has been the neglected bane of the merchant world,” commented Monica Eaton-Cardone.
“Ongoing education is undoubtedly one of the most powerful tools in helping merchants combat the chargeback problem and we publicly welcome the new report from Javelin that helps illustrate the financial cost of going it alone.”
With the challenges of facing fraud and chargeback alone negatively impacting the growth of business, one of the report’s key findings is that outsourcing could be the most viable option. ‘Vendors who specialise in mitigating evolving fraud threats and managing the shifting sands of network chargeback rules could help merchants focus on their core competency areas’ states the report, which would in turn allow merchants to reduce diverted spending and instead focus on revenue-generating departments.
“It’s no surprise that almost two-thirds of respondents believe in outsourcing fraud mitigation and chargeback management.” said Monica.
“Many merchants large and small continue to be the victim of organised crime, and their growth into the digital era remains stunted as budget is spent fighting a seemingly endless battle. Combining education with best practice fraud prevention and customer service delivers the strongest defence against CNP fraud-related activities in a growing online marketplace.”
To read The Impact of Fraud and Chargeback Management on Operations report, click here.
Global Risk Technologies, of which Monica Eaton-Cardone is CIO, is an international technology firm that provides dynamic risk mitigation services within the payment industry – providing comprehensive and highly-scalable solutions for chargeback processing, risk mitigation and fraud management. As a unique provider of exclusive and innovative chargeback remediation solutions, Global Risk Technologies works to bring much-needed payment processing solutions to eCommerce merchants.