Order Insight is a valuable chargeback prevention tool. It opens a new line of communication so you and issuing banks can work together to resolve customer complaints.
But how do you know if Order Insight is a good fit for your business?
Let’s take a look at both the benefits and potential drawbacks of this chargeback management strategy.
Want a high-level overview of Order Insight and how it works? Check our detailed guide first.
PROS
What are the benefits of using Order Insight?
There are a variety of chargeback prevention products on the market today — Order Insight, Ethoca prevention alerts, Verifi CDRN, and Rapid Dispute Resolution (RDR) to name a few. And all of these solutions have the same much-appreciated perks.
- Reduce chargeback ratios. If you can resolve a dispute without a chargeback, you can improve your chargeback-to-transaction ratio. Your chargeback-to-transaction ratio is a metric that banks and card brands use to judge the quality and trustworthiness of your business. Maintaining a low ratio can improve your business’s reputation and reduce the risk of account closure.
- Lower costs. Sometimes, acquiring banks will reduce their payment processing fees for merchants who are able to keep risk in check. You might also be able to lower or eliminate your reserve account.
- Identify issues quicker. Chargeback notices usually take 2-5 weeks to process. A lot of additional disputes can happen in that time period. On the other hand, prevention solutions operate in real time. So if you know about problems sooner, you can solve them faster. Solving issues at their source means you’ll have fewer disputes to manage in the future.
- Save the cost of goods. Because prevention solutions notify you of potential issues in real time, you might be able to stop fulfillment on disputed orders. Retain your valuable merchandise and save the cost of goods.
- Obtain additional merchant accounts. Growing businesses usually need to add merchant accounts to accommodate increasing sales volume. But to get a new merchant account, you have to prove you’re able to manage the accounts you already have. Prevention solutions can help protect your existing accounts so you can argue your case for more.
- Expand to new markets. Entering new markets often means facing new, unexpected threats. If you have prevention solutions in place as you expand, you can protect yourself from the unknown.
- Experiment with sales methods. Again, trying new things comes with new risks. If you want to add additional sales methods — let’s say free trials — you’ll want to proactively set up protections in case it’s not well received.
Those are some pretty compelling benefits!
But what about Order Insight specifically? What benefits does OI have that other solutions lack?
- Reduce manual labor. Order Insight is a completely automated solution. Other prevention solutions — like prevention alerts and prevention RDR — have automated components. But there might still be manual tasks that have to be completed.
- Protect your revenue. Prevention alerts and prevention RDR usually resolve disputes by issuing refunds. While effective, this can cause you to sacrifice revenue. Order Insight resolves disputes with information — meaning you can retain more revenue.
- Spend less. Order Insight costs significantly less than other prevention solutions. Combining low costs with protected revenue means Order Insight can have a high ROI.
CONS
What are the drawbacks of using Order Insight?
While there are several benefits of Order Insight, there are a couple drawbacks to be aware of.
- Integration. A direct integration for Order Insight requires extensive development resources. You can simplify the integration process by connecting via a partner — like AltoPay. However, even with a partner integration, there are still some development tasks.
- Required data. The more data you send, the stronger your case will be — and the greater the chance of resolving the dispute. However, you could go to all the work of building an integration that can pass the maximum amount of information possible, but overlook one or more required elements. And if that happens, the entire response will be discarded. There are no partial response options. It’s all or nothing.
- Cost. All prevention solutions come with a fee. Luckily, Order Insight is relatively inexpensive. But you do run the risk of paying for inquiries that aren’t successful. There’s no guarantee that the issuer will read the information you share. And even if you clearly explain the interaction, the cardholder can continue disputing the transaction. Plus, there is a chance that more than one person at the issuing bank will launch an inquiry. So you could pay for multiple inquiries on a single transaction.
- Results. You could go through the hassle of integrating the solution and navigating fees yet have very little to show for your effort. As of now, Order Insight is only able to reduce chargeback rates by about 10%. That may not be as significant as you had hoped. That being said, chargebacks are an ever-present and growing concern for online merchants — so every little bit helps!
TL;DR
In summary…
Bottom line — do the pros outweigh the cons?
Let’s take a look.
PROS
CONS
- Lower your chargeback ratios
- Reduce fees
- Solve problems quicker
- Prevent fraudsters from stealing your merchandise
- Get more merchant accounts
- Sell in more countries
- Try new sales methods
- Automate the entire resolution process
- Resolve disputes without issuing a refund
- Spend less on fees
- Undertake development work
- Accept an all or nothing philosophy
- Pay a fee without guaranteed success
- Prevent a smaller portion of chargebacks
PROS
- Lower your chargeback ratios
- Reduce fees
- Solve problems quicker
- Prevent fraudsters from stealing your merchandise
- Get more merchant accounts
- Sell in more countries
- Try new sales methods
- Automate the entire resolution process
- Resolve disputes without issuing a refund
- Spend less on fees
CONS
- Undertake development work
- Accept an all or nothing philosophy
- Pay a fee without guaranteed success
- Prevent a smaller portion of chargebacks
Would you like to talk through the pros and cons with someone else? Reach out to AltoPay. We can answer any lingering questions and help you decide if Order Insight would be a good fit for your business.
For more than a decade, Jessica Velasco has been a thought leader in the payments industry. She aims to provide readers with valuable, easy-to-understand resources.
