76% of Merchants Prefer to Manage Chargeback Disputes With Third-Party Tools

An unwelcome side effect of the eCommerce and digital payments boom is the burden of chargebacks and disputes, and more merchants and brands are finding they are better handled by specialized third-party solutions with advanced dispute resolution capabilities.

In the study “Dispute-Prevention Solutions: Protecting Profits and Customer Relationships With Third-Party Tools,” a PYMNTS and Verifi collaboration based on a survey of over 300 merchants  generating revenue from web-based and mobile apps, we found a high percentage of merchants acknowledging that dedicated third-party solutions do a better job than internal systems due to a singular focus on this increasing problem.

Per the study, “The reliance on third-party tools is indicative of merchants’ awareness that vendors specializing in these solutions offer them the most effective tools for resolving cardholder disputes,” with 76% of merchants saying they’re using these solutions.

Get Your Copy: Dispute-Prevention Solutions: Protecting Profits and Customer Relationships With Third-Party Tools

With the need for speed in cardholder disputes a necessity today, the study noted, “That may explain why the alerts and notifications — used by 76% of merchants — are the most common function for third-party tools,” adding that 48% of merchants currently get notifications and alerts about disputes from a card network.

A more efficient and effective dispute resolution process brings other benefits, as we discovered. The study noted that 66% of merchants said these tools help cut operating costs, and 54% said they help reduce the effect disputed transactions have on operations.

Additionally, “Merchants also say the tools help them comply with a card network’s requirements such as controlling the dispute ratio, which 31% say is important,” with 28% of merchants saying these tools help avoid fees from acquiring banks and merchant processors.

See It Now: Dispute-Prevention Solutions: Protecting Profits and Customer Relationships With Third-Party Tools