WHAT THIS MEANS FOR MERCHANTS
The term ‘chargeback’ is often thought to be synonymous with ‘transaction dispute’. Technically, the two aren’t interchangeable.
All chargebacks are transaction disputes, but not all transaction disputes are chargebacks.
Regulations E and Z give cardholders the right to dispute transactions, but only the card brands offer a chargeback process.
Why does that matter?
Think about your dispute management strategy. What does it entail? Are you focused solely on activity facilitated by the card brands — alerts, order validation, and chargebacks? If so, you might not have a complete understanding of the customer experience.
Chargeback data is incredibly valuable. It can help you identify hidden issues and resolve problems at their source. However, there are several reasons why a consumer complaint might not ever make it to a chargeback — an issuer’s choice to limit protections is just one of the reasons. Therefore, chargebacks shouldn’t be the only metric you use to gauge customer satisfaction, the effectiveness of your processes, and the risk of potential revenue loss.
Focus on creating an exemplary customer experience — one that ensures satisfaction and resolves issues without the need of a chargeback.