What to Look For When Choosing a Chargeback Company

Want to make some changes to your chargeback management strategy? Ready to switch to a new solution provider?

We can help.

Questions to ask when vetting a new solution provider

Here are some questions — and desired answers — to help guide you through the transition from one provider to another.

Dig into the solution provider’s history and experience. If you are paying an expert, they ought to be an expert!

The more experience, the better.

To gauge a provider’s longevity, it is important to understand the industry’s history and the timelines for solution development.

We’ll outline AltoPay’s history to provide context on the industry as a whole.

Chargebacks have been around for decades. But modern chargeback management solutions have only been in existence for about 20 years, first emerging in 2005 when startups Ethoca and Verifi launched their prevention alert products.

In 2012, once the solutions had proven themselves to be effective, AltoPay established a reseller partnership with Ethoca and launched the company’s AltoShield product. Today — 14 years later — AltoPay is Ethoca’s longest standing partner.

After securing a reseller partnership with Ethoca, AltoPay approached Verifi to establish a similar relationship. And Verifi eagerly agreed, turning AltoPay into Verifi’s first-ever facilitator for CDRN alerts.

You won’t find a more established provider for chargeback prevention solutions than AltoPay.

And longevity matters.

Chargebacks are complex. Managing them requires a deep understanding of what does and doesn’t work. Time and experience are the best determiners of success.

Whatever solutions you put in place, you need a strategy to make them all work to the best of their abilities.

Look for a provider that has it all:

• Ethoca alerts
• Verifi CDRN
• Order Insight
• RDR
• Visa CE 3.0

You might not need all the solutions, but it is nice to have everything available in case you want to adjust your strategy in the future.

In a perfect world, you’d have all your solutions with a single provider. This strategy has multiple benefits:

• You’ll have greater transparency if you can see everything in one place rather than having data siloed in different platforms.
• You’ll learn one platform, negotiate one contract, and have one point of contact — all of which is more efficient than managing responsibilities for multiple platforms.
• You might get a volume discount on pricing.

It is possible to enroll some MIDs with one provider and other MIDs with a different provider. This can be a good way to try out a new partner. Run A/B tests between the two to check transparency, accuracy, support, cost, and performance.

But ultimately, you’ll probably want to bring everything under one roof.

Hopefully, the provider will say yes! Because your business needs a customized strategy.

Not all businesses need all available solutions. If someone is trying to sell you everything without learning about your business and what you actually need, that’s a red flag.

If you don’t know which solutions are best for your business, you could waste a lot of money on the wrong strategy.

Again, hopefully this is a yes!

The fee you pay to a solution provider shouldn’t just be for the solution’s functionality — it should also cover advice, insights, and best practices.

A true expert won’t make you figure things out yourself.

Look for solutions that have minimal technical lift yet ensure data security and efficiency.

Onboarding timelines are usually dependent on two things:

• The solutions you sign up for. Prevention alerts have the quickest onboarding timeline and can be up and running in as little as one business day. Order Insight and Visa CE 3.0 have more technical requirements and usually take the longest to onboard. RDR sits right in the middle of the two extremes and can take up to a week turnaround.
• Your own availability. If you have immediate access to information the provider requests and can make necessary process updates when asked, you can go live quickly. The longer it takes to get what the provider needs, the longer the onboarding timeline.

These two factors should be fairly standard for all providers. And they should be the only two elements at play. A provider shouldn’t needlessly draw out the process because their own development or support resources are lacking.

The desired answer will depend entirely on your own preferences. Most well-established providers will have existing integrations with many of the commonly used gateways and CRMs.

The more important thing to note is whether or not the service provider can integrate with your CRM or gateway if a direct connection hasn’t already been established.

The key words you’re looking for here are “flexible automation.”

You ought to have the option to automate as much or as little of the process as you want. Customization trumps standardization here.

But usually, the more automation the better. Automation increases efficiency, decreases errors, cuts costs, and improves ROI.

A quality solution provider can automate the following for each solution.

Alerts

• Match the alert to the original order
• Issue a refund
• Respond to the alert vendor
• Terminate future recurring transactions
• Add the customer to a negative list (if desired)

RDR

• Reconcile your CRM to note the refund
• Cancel future recurring transactions
• Add the customer to a negative list (if desired)

Intelligent decisions are only possible if you have accurate, helpful data.

The desired answer will vary by business. Make sure the provider can offer what you need.

Keep in mind the most helpful and robust reporting requires a combination of two data sources:

• Your chargeback and processing data which comes from your processor or acquirer
• Your prevention solution data which comes from the solution provider itself

Some companies only report on the solutions themselves. For example, the number of RDR cases received, the amount of each RDR case, the assigned reason codes, etc. This information is helpful, but incomplete.

To accurately draw conclusions about your business, you need the second data source: the chargeback and transaction information from your processor or acquirer.

This can help you understand why disputes are happening, how to solve the underlying issues causing disputes, and if your solutions are effective.

As you are evaluating the data, be aware of two red flags.

1. Useless data. Some providers think more equals better. But “more” can just add confusion and unnecessary complexity.
2. Delayed data. Real-time reporting is essential. Don’t wait days or weeks for your insights.

The answer to this question should be yes!

Solution providers usually have out-of-the-box reporting — data that all users can access. But they should also allow you to manipulate the data in a way that best suits your business — filter, sort, export, etc.

And customized dashboards can help eliminate distractions from reports you don’t need.

Quality support ensures you always have someone watching your back and you aren’t left to figure things out on your own.

Chargebacks can happen at all hours of the day and night. So it is helpful to work with a solution provider that covers multiple timezones. Greater availability from support and tech teams means you can get help when you need it.

Teams ought to be able to respond within one business day or so. Urgent requests should be responded to within hours if not minutes.

Chargebacks are complex. And some solutions or answers to questions may take more time. However, if it takes too long to get the information you need, small problems could become major liabilities.

You’re looking for helpful, proactive support. So make sure you get at least this from your new solution provider:

• Technical assistance. Onboarding new solutions can be a daunting task. Make sure the solution provider is willing and able to help you get set up as quickly as possible.
• Ongoing consultations. Someone should be reaching out regularly to help you monitor trends like VAMP ratios and chargeback activity.
• On-demand support. Not only should support reach out at regular intervals, the team should also be available any time you have questions.

Support can be a major differentiator for providers.

Some teams — especially those at newly established companies — lack the expertise and insights needed to give you helpful, accurate information. And sometimes, support staff will not be honest or fully transparent. Some might not even acknowledge your requests!

As you are vetting companies, pay close attention to team members’ communication style and industry knowledge.

The final consideration is usually the most influential: price. However, there are a couple of old sayings that are important to keep in mind.

You get what you pay for.

And, if it seems too good to be true, it probably is.

In this day and age, it’s nearly impossible to give a universal answer for chargeback management pricing. There are just too many variables at play. Each business is different.

However, solution providers ought to be able to give you a range or a starting point. The best, most transparent companies will even publish their pricing on their website. You can click here to see AltoPay’s pricing.

As you discuss price, be aware of a couple red flags.

• Rock-bottom pricing. Some solution providers will violate contract terms with Ethoca and Verifi to undercut their competitors with lower prices. You might pay less for each individual alert, but you’ll receive way more alerts than you should because the solution provider has to recoup their losses.
• Monthly minimums. Some providers will require monthly minimums that, when you sign up, might seem reasonable. But if your alert volume drops — for example, you close a MID — you will be stuck paying a fee every month because you will no longer meet the minimum.

Of all the things you ask about, contract terms are the most important.

There are several solution providers in the industry that have long-term contracts — like three years! And contracts are iron clad — there is no getting out of them. Which is unfortunate, because these long-term contracts are usually applied to some of the worst solutions and support in the industry.

Look for a service provider that doesn’t have long-term contracts. If the solutions provided end up not being a good fit for your business or you don’t like the level of support being offered, you’ll want the ability to make changes. Don’t get locked into a bad situation just because the pricing seemed like a good deal.

If you’re looking for a new chargeback management company, we’d love for AltoPay to be a consideration. Schedule a call with our team today to learn more about our AltoShield product.