Chargeback management isn’t always something businesses plan for from the start. But recent data makes it clear that they should: by the second half of 2022, chargeback rates were up 35% across Sift’s global network from the start of the year, with the average value of every dispute falling around $193.00. And according to Merchant Fraud Journal, businesses are expected to pay over $100 billion in chargebacks in 2023 alone, in addition to whatever losses they incur as a result of payment fraud, account takeover, and scams—all of which play an influential role in dispute rates and resolutions.
But increases in both the number and value of disputes aren’t the work of sophisticated fraudsters alone. Across Sift’s global network from January–September 2022, approximately three-quarters of disputes were labeled “fraud” by the cardholder—yet according to consumers themselves, a significant portion of those cases may not have been legitimate to begin with.
In a recent survey, 23% of consumers admitted to participating in first-party fraud, during which they filed a fraud dispute for a transaction that was not truly fraudulent. Because that figure only represents self-proclaimed first-party fraudsters, the actual percentage is likely much higher.
Building dispute management into trust and safety operations is more important than ever for companies being hit by multivector abuse. Protecting the entire customer journey against all varieties of payment fraud is necessary to foster sustainable growth—and it takes a full-coverage solution to make that possible.
Complete protection against payment fraud fuels growth and loyalty
Growing profitably is priority #1 for businesses, but failing to have a dispute management strategy in place as you scale is a quick way to lose profits and trust with your users. Well over three-fourths of consumers (83%) would abandon a brand indefinitely if they fell victim to a fraudulent dispute after interacting with that merchant. Finally, rising disputes indicate that a business is also facing payment abuse, and 80% of consumers would choose to shop elsewhere if they were financially defrauded, whether a chargeback resulted or not.
But businesses with a solution in place for true payment fraud, friendly fraud, and chargeback management are winning: Sift customers using both Payment Protection and Dispute Management are seeing improved fraud prevention accuracy of up to 1.6%, as well as accepting 0.6% more orders.
Sift Dispute Management, the first-ever chargeback solution to use real-time machine learning to improve dispute responses, is an ideal partner to Sift Payment Protection. Combined, they provide complete, end-to-end protection against the entire spectrum of payment-related fraud losses. Trust and safety teams can stop more fraud at the source, while winning disputes, with simplified operations, robust data, and compelling evidence that allows them to prioritize high-value chargebacks.
True control with the combined power of Sift Payment Protection and Dispute Management
Sift’s flagship Payment Protection product enables instant risk detection and prevention for transactions, stops fraudulent money transfers, and safeguards against alternative payment abuse. It automates decision-making, reduces manual review, and delivers insights in real time. Payment Protection customers also benefit from enhanced payment fraud defenses, streamlined chargeback resolution, and PSD2 compliance, giving them the confidence to expand into new markets and regions.
Layered with Sift Dispute Management, businesses can quickly make data-driven decisions using in-depth insights. Teams are able to manage all dispute operations from a single, intuitive console, leverage several key integrations, and proactively stop chargebacks and first-party fraud.
The latest product enhancements make for an even more powerful chargeback management solution by expanding network coverage and leveraging ML to fight first-party fraud:
- New integrations and broader datasets. Dispute Management has expanded to include Adyen and PayPal, two of the biggest payment processors in the market This allows Sift to programmatically facilitate data ingestion, dispute response preparation and delivery, and win/loss outcome updates.
- ML-powered Response Recommendations. Sift was founded on the principle of solving fraud problems with machine learning, and has taken steps to apply the same automation to chargeback management. With supervised learning, Dispute Management offers Response Recommendations, a first-of-its-kind feature that optimizes an analyst’s chances of winning dispute cases by offering recommendations of what data should be inserted into the response.
- Intelligent automation and proactive protection. A merchant’s chargeback solution should make it easy to proactively protect against chargebacks. Sift simplifies chargeback operations by offering Inquiries and Alerts via Visa and Mastercard, as well as automatically building and delivering responses with our rules-based DisputeBot engine.
- The most comprehensive chargeback reporting and insights available on the market today. In-depth insight into disputes, alerts, and inquiries plus an executive summary view give businesses a direct line of sight into the health of their chargeback operations. Businesses need deep, holistic insights at both a broad and granular level in order to maintain healthy win rates, especially as fraud evolves and industry requirements change. Reports include:
- Analyst and team performance
- Download comprehensive dispute and alerts reports
- A high-level executive summary report representing business-critical data
Sift is committed to staying one step ahead of industry changes that impact win rates and financial losses. While many fraud solutions provide piecemeal and fragmented capabilities, the combined coverage of Sift Payment Protection and Dispute Management enables fraud teams to maximize every opportunity for secure growth with complete protection against true and friendly fraud losses with a single, leading Digital Trust & Safety Platform.
Request a demo to discover how the combined capabilities of Dispute Management and Payment Protection provide businesses total protection from checkout to chargeback.