Big Interview: ‘The whole world needs to support a unified chargeback and dispute system’

Big Interview: ‘The whole world needs to support a unified chargeback and dispute system’

When Monica Eaton, CEO of Chargebacks911, first started her company a decade ago, she wanted to be able to dial 911 and save herself and her company from chargebacks. Now, she is a voice for the many merchants facing this issue.

The travel industry has recently seen an increase in chargebacks among the backdrop of summer strike action and poor weather across Europe.

A pain point for many, Monica Eaton, CEO of Chargebacks911, also “suffered” more than a decade ago and is the reason for starting the company.

“Chargebacks was an unbelievable problem that I couldn’t solve,” said Eaton.

Eaton, who had originally wanted to create a marketplace and compete with eBay, found that after doing business in different markets, irrespective of the operating market, they all saw chargeback issues.

After interviewing every single consumer willing to speak to her, that had filed a chargeback, Eaton discovered that there were a “huge” number of problems creating unnecessary chargebacks. 

“Bottom-line though, it all came down to data. Data was the problem. There was either missing data or misinterpreted data. So, I developed a technology first just for myself. I just wanted to save my own business”.

Eaton who has a background in technology believes “nothing is impossible in technology; it just takes a little longer”.

“I realised I was not alone and so many businesses needed this. I never had a vision of doing business in the payments industry or being corporate. 

“I was actually enraged, and I thought, you know, I want to be a voice for every merchant out there because what I wanted as a merchant myself was to dial 911 and to be rescued from chargeback hell.”

In the travel industry, chargebacks are nuanced compared to other sectors, especially post-pandemic. 

“Since Covid, we’ve created a shift in the way that consumers behave and the expectations they have in the travel industry due to very legitimate issues. 

“We had airlines going out of business, in administration, we had all sorts of people that were losing all of their money from tour packages from their holidays that they didn’t have a chance to redeem.

“We had to exercise a lot of re-education in order to resolve terrific amounts of insolvency and insecurities with insecurities.”

The challenge of educating consumers again, to go back to their airline or travel company and ask for a refund or a voucher, instead of going straight to their banks is a one of the main reasons for increased chargebacks in the sector.

“A new catalyst though is the sheer volume and the troughs of people. Airlines are not planned to handle this amount of business and we’ve seen this all over the world, it hasn’t just been relegated to Europe or the US. 

“The bottom line is the tolerance of consumers, for cardholders and for their banks, for the travel industry making mistakes doesn’t exist.”

Increased efficiencies in banks’ processes for chargebacks has also played a pivotal role in the recent increase in chargebacks, compared to several years ago when the process was a lot more arduous. 

“We’ve removed friction to make things faster. When you remove frictions, volumes increase.”

“The travel industry has also changed in order to save their margins and adjust to these behaviours. 

“As a result, we’re seeing a lot of innovation from airlines and the travel industry as a whole, using different strategies in order monetise opportunities.”

This move sees airlines do more account-based marketing and recurring subscriptions. 

“Any time you sell subscriptions, you are now 50x more likely to have chargebacks because any type of subscriptions typically call their banks. 

“Theres also offline transactions, more and more airlines today are selling separate charges for seat upgrades and inflight food and beverages.

“It’s been very innovative in this space. There’s lots of new additional charges and opportunities and all of those additional charges now create more opportunities for consumer chargebacks.

When it comes to avoiding unnecessary chargebacks, “we need to recognise we’re always competing with the consumer’s bank and that convenience.”

Staying in communication with your consumer is key. Eaton said: “Instead of just sending an email that says here’s your confirmation, send a confirmation email and include a button or link where if the consumer has a question, if want to get information, if they want to cancel their account. 

“The reason being, as consumers, we’ve all searched our emails and found a whole bunch of confirmation emails and then we have to investigate how can I contact this merchant.”

“With flights and vouchers, in order to avoid a chargeback with those, make sure that the consumer is informed that this replaces their ticket, and they no longer qualify for a refund. 

There’s no quick fix to chargebacks but the team at Chargebacks911 have turned to AI and Machine Learning to help.

“Utilising AI and machine learning (ML) is an fascinating and amazing tool in the world of chargebacks and it does help with the process.

“It’s all about data, we need the most data, and we need to be able to interpret and understand what it means. 

“If you utilise machine learning and AI instead of just receiving chargebacks, every single chargeback should be responded to and this is something that most people don’t do in the industry.

“You should investigate every single one equally so you can understand the story that led to this chargeback.

“Technology helps automate the collection of all this data and interpret what this data means so that better decisions can be made and higher authorization rates ocrrur.”

The process using technology this way can allow for identification of an internal issues but also once responded to, can help consumers understand not to file chargebacks like this again.

The SaaS solutions provider’s platform that works with merchants and financial institutions, as well as supporting 900 different data types and plug-in integrations, is designed to “revolutionise the way that disputes and chargebacks work today”.

Tasked with providing clients with technology that is “scalable and agile enough to adjust to all the various data models” in travel is “very complicated” but Chargebacks911 can create an environment that “improves results and delivers real-time information”.

Chargebacks911 can’t eradicate the issue by itself, this “complex” problem requires “better collaboration and shared insights. Data is key”.

“The whole world needs to support a more unified chargeback and disputes system. We need a unified approach, we need a unified data set, unified rules and agree on standards.”