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Excerpt from an eEvid.com business proposal for a large e-commerce company. Sep. 18th, 2014
eEvid.com is not only the most straightforward, yet effective, solution for registering the contents and delivery of emails; it also is, by far, the most competitive in price. We believe these two advantages can have a significant impact on the problem THE MERCHANT is currently facing regarding chargeback disputes:
- According to some sources, more than 50% of e-commerce chargebacks are undisputed and go directly to losses, often because merchants tend to believe that a $100 transaction dispute is simply “not worth the time.”
- The rise of friendly fraud (customer chargebacks without a reasonable reason) is speeding up and adds to the regular fraud practices (e.g. stolen credit card information).
- The cost associated to chargeback issues goes beyond revenue losses and financial penalties: it can also have a serious impact on how the merchant’s financial risk is rated by banks and card issuers.
- VISA and MasterCard’s chargeback rule changes can have a serious financial and business impact on merchants failing to provide a minimum level of compelling evidence when confronting chargeback disputes in Reason Code 83 and other scenarios.
The ability to implement a technology capable of proving that a particular transaction did effectively take place will not only reduce the volume of lost chargebacks and associated penalties, but should also contribute to improving the financial risk rating of the company and retaining market confidence.
We don’t know the scope of the chargeback problem currently faced by THE MERCHANT. However, from the information THE MERCHANT has provided, we estimate this to be an annual loss of around (…) euros, if not more. Whether or not correct, we have no doubts that investing in our services will have a positive ROI, confirming it as a highly cost-effective decision.
Frequently Asked Questions (FAQ)
1. What is friendly fraud in e-commerce?
Friendly fraud occurs when a legitimate customer makes a purchase but later denies it by filing a chargeback, often without a valid reason. This type of fraud has been rising sharply in recent years.
2. Why do merchants often not dispute chargebacks?
Many merchants consider small-value disputes (e.g., $100) not worth the time and resources to fight, leading to automatic losses.
3. How does registered email help in chargeback disputes?
Registered email provides irrefutable proof of communication and transactions, helping merchants demonstrate to banks and card issuers that the purchase was legitimate.
4. Can using registered email improve a merchant’s financial risk rating?
Yes. By reducing chargeback losses and providing compelling evidence in disputes, merchants can positively influence their financial risk assessments by banks and payment networks.
Conclusion
Chargeback disputes are a growing problem for e-commerce, especially with the rise of friendly fraud. By using registered email from eEvidence, merchants gain reliable proof of transactions that helps them fight disputes, reduce losses, and improve financial standing. For any merchant looking to strengthen compliance and profitability, integrating this solution is a smart, cost-effective decision.
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