Call Spoofing and Fake Chargeback Disputes
Fraudsters may use spoofed phone numbers that appear to belong to banks or card issuers, tricking contact center agents into processing unauthorized refunds. In some cases, fraud rings use scripted conversations to deceive customer service agents into providing refunds before filing chargebacks, effectively“ double-dipping” on their fraudulent claims.
OTHER PLAYERS PAY, TOO
Merchants get hit the hardest when it comes to chargebacks. Risk management firm LexisNexis reports in its“ True Cost of Fraud” study that every dollar lost to fraud ultimately costs merchants $ 4.60 to prevent, fight, and resolve.
But it’ s really a problem for the whole payments ecosystem. Banks that issue credit cards, for example, also end up spending more time handling invalid customer disputes.
Considering that merchants file hundreds of millions of chargebacks every year, according to our industry research and knowledge, this translates to several billion dollars wasted.
Additionally, the subsequent investigations required can further drain resources and erode profits. A key contributing factor to this problem is customers ' lack of sufficient transaction information, leading to unnecessary disputes and straining call center resources. According to Aite-Novarica( via TSYS), providing cardholders with clearer transaction details could reduce call volume by about 25 %.
Hence, a well-planned strategy can result in significant monetary savings and improved customer satisfaction. Given the cost, time investment, and customer retention implications, preventing chargebacks through proactive customer support before they happen is indeed more cost-effective than fighting them after they have occurred.
DEVELOPING THE RIGHT RESPONSE
Simplifying and improving the quality of the customer service experience is one of the best things that merchants can do to avoid disputes. Execution does not need to be complex; just five ingredients are necessary.
1. SHORTER HOLD TIMES
A cardholder who can file a chargeback using their bank’ s mobile app, all without the hassle of picking up the phone and speaking to anyone, will naturally prefer the former unless the latter is just as frictionless. This means that an acceptable average wait time should last no longer than two minutes; ideally, a customer’ s call should be answered in as little as 20 seconds.
Once the customer connects with an agent, their issue should be addressed promptly and, if possible, in a single call. Crucially, this means avoiding an experience in which a customer is transferred from department to department because no agent is able to resolve the caller’ s grievances.
2. EMPOWERED STAFF
Merchants should empower customer service representatives to issue refunds, provide store credit, or otherwise offer compensation to disgruntled customers. As a best practice, refund privileges should not be“ gated” behind supervisors or second-line managers. Instead, frontline agents should be able to use their discretion and judgement to reverse transactions on the spot.
3. AN OMNICHANNEL MINDSET
An omnichannel approach is a must for customer service for two reasons. The first is that shoppers today, especially younger ones, may not default to picking up the phone. To cater to different preferred methods of contact, customer service representatives must be cross-trained to resolve complaints through alternative channels, including live chat, SMS, social media, and email.
Second, eCommerce merchants that lack a physical storefront are at an inherent disadvantage. While customers can interact with brick-and-mortar merchants in-store, shoppers have no way of approaching eCommerce sellers in-person. For this reason, online merchants must be exceedingly easy to contact if they are to earn the trust and confidence of their customers.
4. IMPLEMENTING BREAKTHROUGH TECHNOLOGY
Contact centers can’ t rely on resolving customer complaints manually while still hoping to get ahead of chargebacks. Instead, they should enlist proactive support that use cutting-edge technologies like AI-enabled answering and transcription services.
Pairing these tools with models that can analyze caller sentiment and distill customer interactions into key takeaways can empower customer service representatives to make better decisions about how to resolve complaints.
Another example is a branded caller ID, which allows merchants to display their company’ s name, and in some cases their logo, when outbound calls are made to customers. It can prompt customers who might otherwise ignore messages to return calls and texts. This proactive outreach can help resolve issues, provide support, and prevent misunderstandings that might otherwise lead to disputes.
5. PREVENTING, DETECTING, AND MITIGATING FRAUD
Customers interact with contact centers directly. So, customer service representatives are uniquely positioned to play a role in fraud detection and prevention.
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