[danpalmer]

Out of interest, how effective do you find challenging the chargebacks is in practice?

I always thought about automating this (or for lost delivery claims with shipping companies) but the numbers never worked out for it to be worth it because the success rate seemed like it would be so low.

[tinyprojects]

I've only trialled this system recently, but my current results are:

1 Win

2 Partial Wins (basically a loss with how much you get back)

3 Losses

All these payments were fraudulent (a user doing credit card testing) and disputed by foreign banks (Thailand, Malaysia, Brazil). I think these cases are much harder to win, because the actual card holder is technically in the right to request the money back on their stolen card for a transaction they didn't do.

Much better than my previous results of just accepting each dispute though :)

[danpalmer]

Thanks. Are your charges much more than the chargeback processing fee?

One of the issues for us was that while the chargeback processing fee was ~£20, the order values were only ~£100-300, so even in the worst case of ~£320 lost, multiplied by roughly 1 in 10 non-fraud mistaken chargebacks, and 50% win rate, the value is only £16. At that amount it would take a lot to recoup the development costs. These are all very rough numbers, but illustrative I think.

[tinyprojects]

Much less - 99% of our transactions are < $20, so every time we get hit with a dispute it's already an instant loss in terms of the dispute fee cancelling out any revenue gained back from winning the dispute.