North America Paytech Weekend Read

Chargebacks911: How to Come Out on Top of the Post-Peak Sales Chargeback Lag

Many businesses consider chargebacks to be a natural consequence of doing business, but these days this simply doesn’t have to be the case.

Monica Eaton-Cardone is the COO and Co-Founder of Chargebacks911, the first global company dedicated to mitigating chargeback risk and eliminating chargeback fraud. As industry-leading innovators, the company is credited with developing the most effective strategies for helping businesses maximise revenue and reduce loss in a variety of industries and sectors within the payments space.

Here, Monica gives merchants her top tips for managing chargebacks and retaining revenue following the peak sales season.

Monica Eaton-Cardone, COO and Co-Founder of Chargebacks911

Chargebacks have traditionally been an issue for merchants in the first quarter of the new year, reaching annual highs thanks to the well-known “chargeback lag”. After sales in November and December soar in accordance with the peak sales season, there is only one-way chargeback rates go for many businesses and that’s up.

This upward trajectory occurs for a number of reasons. From issues with orders that were made during the peak sales season, to consumers, no longer giddy with the Christmas spirit, taking stock of their spending over the last couple of months and instigating chargebacks.

As this process tends to occur 60-90 days after any peak sales period, it is not until spring each year that merchants can categorically say whether the festive boost to bottom lines was actually worth it.

The Seasonal Period Was Different This Year

All that said, merchants went into the 2020 seasonal period under rather unusual circumstances. Economic uncertainty, driven by job losses and furloughs, has led millions to hold back on their spending (with this only set to change by the second half of 2021) while providing greater potential for regret over previously purchased items.

And as those consumers that are spending now overwhelmingly doing so online, friendly fraud has become much easier to commit. With consumers shopping from the safety of their own home, it is not difficult for them to claim that packages didn’t arrive or were damaged upon receipt.

In fact, as a result of novel trends stemming from COVID-19, non-fraud chargeback issuances were up 23% globally in June 2020 when compared to the same time in 2019. When instances of friendly fraud are also considered, industries across the board suffered chargeback losses 10 times higher than before COVID-19.

Are Merchants Contributing to Their Own Problems?

Businesses may not want to admit that their internal processes are contributing to their chargeback rates, but in many instances, this is the case. In any normal year, online merchants tend to underestimate the immense traffic they receive during the November-December trading period. This can result in logistics not being up to scratch, leading to unhappy customers and increased chargeback or refund claims.

Likewise, if customers purchased goods that they feel weren’t as advertised on the company’s website, they are more likely to want to get their money back. What’s more, having a returns process that is convoluted or time-consuming can result in consumers bypassing the merchant altogether and turning to their banks for refunds via the chargeback model – costing the merchant extra in admin fees.

The effects of these errors are likely to be compounded in a year in which many merchants have moved into the online space in order to survive while lockdown measures have been in place. This is not only true for those new to the digital sphere, but the increased demand for e-commerce, as customers abide by social distancing measures, has presented more opportunity for them to occur.

As we don’t see this trend subsiding any time soon, it’s clear that businesses need to be prepared for their new omnichannel strategy. With that in mind, here are four tips for keeping on top of chargebacks moving forward:


Preventing chargebacks from happening is the best way of handling them. Happy customers are much less likely to instigate chargebacks, so keeping on top of customer service and responding to them quickly will help keep chargeback rates down.

In addition, proactive communication with your customers can stop them from getting confused. For example, customers may believe that purchases have been lost in the mail if they don’t arrive on time, so keeping them updated with tracking information can help.

Chargeback prevention doesn’t have to solely rest on the shoulders of merchants either. Alert programs are services whereby participating issuers alert a merchant every time a dispute is filed for a credit card fraud claim. That way the merchant can refund the customer before they’re hit with a chargeback.


If merchants refund instances of friendly fraud, they can end up looking like easy targets. On the other hand, challenging genuine claims can result in losing loyal customers. That’s why it’s so vital that merchants can identify the reason code for their chargebacks, which could be either merchant error, criminal fraud, or friendly fraud.

To do this, businesses should employ a multi-layered criminal fraud prevention strategy and use data to find internal errors that cause chargebacks. Once genuine claims are resolved in this way, instances of friendly fraud can be weaned out. However, if merchants are struggling to identify the source of their chargebacks, it’s always worth seeking help from an outside source, such as a third-party solution provider, which has access to industry experts.


Chargebacks and friendly fraud aren’t simply a cost of doing business, yet many merchants believe they are, letting them run wild in response. Every friendly fraud chargeback should be vigorously disputed for maximum revenue recovery and to stop the issue from growing further. We’ve found that 50% of cardholders who successfully commit friendly fraud will do it again within 60 days, meaning it can become a real issue.

Merchants can keep on top of friendly fraud by going through the representment process. At the same time, being ardent with this process will show processors and issuers that they are a tough nut to crack and they will be taken seriously.


With the ongoing digitisation of commerce, chargebacks aren’t going anywhere anytime soon, so merchants need to adapt to stay on top of them. However, one of the biggest problems merchants tend to have is the aggregation of data, from their acquirer or processor, CRM, OMS (Order Management System), fraud protection provider, and consortium chargeback data from similar merchants.

By properly managing and storing data from the payment process, merchants will be in a better position when proving whether or not friendly fraud has occurred. Information collected for this can include identifying data such as card numbers, CVVs, and the customer’s name. Merchants should also keep records of when transactions took place and, if possible, require goods to be signed for at the point of delivery.

If all this sounds like a lot to handle, the good news is by outsourcing your chargeback management to a specialist mitigation solution, such as Chargebacks911, you can let the experts do the hard work for you.

Get Ready

The chargeback spike is coming, so now is the time to do what you can get ahead of the curve. You won’t regret it.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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