Chargeback Management Solution
Litle & Co., a pioneer in e-commerce payments processing, nabbed its first CNP Award this year as the Judges Award winner in the Best Chargeback Management Program category. The company, which was acquired by Cincinnati-based processing giant Vantiv, says an important part of preventing chargebacks is being aware of the fraudulent transactions that usually precede chargebacks. Unfortunately, often a merchant’s first indication of any fraud is the chargeback itself.
Litle says its Fraud Chargeback Prevention Service (FCPS) starts by generating a daily report of fraudulent transactions confirmed by cardholders’ issuing banks. Armed with that information, a merchant is able to act before a chargeback is initiated by refunding the transaction. Handling the incident as a refund rather than a chargeback reduces the risk of running afoul of the card brands’ chargeback threshold limits and reduces the costs associated with processing chargebacks.
FCPS also enables Litle automatically to refund any transaction that appears on the daily fraud advice report. Merchants also have the option to customize settings for the auto-refund using criteria such as method or payment or ticket price.
“This shifts the workload of issuing refunds from the merchant to Litle,” the company says, “which means these refunds can happen faster, further increasing the likelihood of preventing the chargeback.”
While prevention is half the cure, it’s not the entire solution for Litle. Merchant clients have access to Litle’s chargeback analyst team, which employs its representment win predictor to analyze representment outcomes across all chargebacks. The system predicts the probability a merchant will win the chargeback so the chargeback analyst can make a more informed decision when deciding to represent the chargeback.
Litle says merchants can prevent 25-30 percent of the chargebacks they would normally receive using FCPS. The company notes, on average, 70 percent of the records contained in the daily fraud report can be acted on and about 50 percent will turn into chargebacks if not refunded.
“Giving merchants a whole-picture approach to chargeback management gives them the tools necessary to manage chargebacks effectively,” Litle says. “This allows them to remain well under Visa and MasterCard thresholds as well as reduce chargebacks, and chargeback related costs."