As the global eCommerce market continues to grow, eCommerce fraud will follow the same trend. Unfortunately, almost all eCommerce merchants have experienced the pain of fraudulent chargebacks. While it is possible to minimize chargebacks by rejecting all “risky” transactions, such a strategy is bad for business, as many good customers will be turned away along with the bad ones. In fact, our data suggests that 66% of orders typically declined by eCommerce merchants are actually placed by legitimate customers and should have been approved.
To help merchants accept more orders without the risk of costly chargebacks, we offer full chargeback guarantee on all Riskified-approved orders. In this article, I explain how our chargeback guarantee works, what it covers, and why Riskified offers this service.
What Is Riskified’s Chargeback Guarantee & How Does It Work?
In order to understand how our chargeback guarantee works, you must first have a general understanding of how Riskified’s solution works. With Riskified, merchants control which orders are submitted for review. Every submitted order is quickly analyzed by our system, using machine learning models, elastic linking, behavioral analysis, and other fraud detection methods, resulting in an ‘approve’ or ‘decline’ decision. We back our approvals with a guarantee. In other words, in case you incur a fraud-related chargeback for an order we approved, just let us know and you will be reimbursed.
Merchants can use a simple in-app tool to easily provide the required documents (chargeback notice and shipping documents), and we process the chargeback reimbursement request and issue a credit refund within 48 hours. Riskified covers the order amount, shipping costs, and any chargeback fees from the payment processor, as well as our approval fee. Our chargeback guarantee is not limited to physical goods, but covers also digital goods order, where there is no shipping information.
Since the goal of our chargeback guarantee is to ensure merchant don’t pay for our mistakes, we cover all chargebacks related to unauthorized card usage or stolen financial information, but do not cover chargebacks for reasons such as ‘item not received’ or ‘item not as described’, as these are not related to fraud. Also, since Riskified’s decision is based on the order details at the time of review, we do not cover chargebacks if details such as order amount or shipping address are changed following our approval. In case the order details change, we ask that merchants inform us and then review the order again free of charge.
How Can Riskified Offer Chargeback Guarantee?
Some of you may be thinking “Well, the only way Riskified can afford to offer chargeback guarantee is by rejecting high-risk transactions.” In fact, the contrary is true. Riskified guarantees higher approval rates for our merchants. We built our full-stack technology specifically to approve high-risk transactions, and it’s our exceptionally accurate eCommerce fraud detection models that allow us to back every approval with full chargeback guarantee.
Unlike virtually every other fraud prevention tool or solution available today, we devised a pricing model that aligns us with your goals – growing the business. Rather than highlight “high-risk” indicators and warn you about them, we strive to approve orders and drive sales despite mismatches.
Riskified stands behind its 100% chargeback guarantee so you know you can depend on us. Our chargeback guarantee allows you not only to avoid the cost of fraud-related chargebacks, but more importantly, to approve more orders and grow your customer base.
Chargebacks as a Growth Opportunity
While we are always sorry to see an order we approved return as a chargeback, there is a silver lining. For Riskified, chargebacks are an opportunity to learn something new. Our dedicated team analyzes every chargeback incurred. Their insights are used to optimize our fraud detection models and further boost our decision accuracy. Whether it’s a unique new fraud method or a case of “friendly fraud”, a lesson learned from one chargeback can help keep many other stores safe. Improving our fraud detection accuracy positively impacts hundreds of merchants across verticals who trust us to manage their fraud operations.
We believe fraud management doesn’t need to be an integral part of your job. Let Riskified handle fraud – and focus instead on growing your business.
Want to know how to protect your eCommerce business from fraud and chargebacks? Feel free to contact us at any time and we’ll be glad to showcase our solution and extend our chargeback guarantee to your business.