Forget about four-letter words. If you run a business that accepts credit or debit cards, one of the worst words you can say is "chargebacks."
A chargeback occurs when a customer disputes a sale with their bank that's been paid for with a credit or debit card. Charges are disputed for a variety of reasons: a broken item, a package that never arrived, an unauthorized transaction, or even an attempt at fraud. Often, though, chargebacks are cases of friendly fraud (the customer failed to recognize the charge and mistakenly disputes it) or chargeback fraud (the customer received their product and is knowingly and wrongly trying to get it for free).
As a merchant, a successful chargeback means you lose both the money the customer spent and the product or service you delivered. In addition, the time your staff spends fighting a chargeback for a legitimate charge often costs your company more in payroll than the transaction you're disputing.
While chargebacks will always be a part of doing business, the way you approach them can be significantly improved by using automation to replace manual evidence gathering and claim submission.
That's where Chargehound comes in. Chargehound is a comprehensive, automated chargeback solution that gathers and submits chargeback evidence to help make fighting chargebacks effortless.
Braintree merchants are able to use Chargehound to completely automate their chargeback process through a simple connection using OAuth. Braintree's OAuth protocol allows merchants to grant authorization to connected partners, such as Chargehound, for them to access information like transactions, customers, payment methods, etc. to take action on your behalf. By automating disputes with Chargehound, Braintree merchants have been able to increase their dollars recovered and free up valuable time for their teams.
How Braintree's Dispute API enables dispute automation via third-party vendors
As an automated chargeback management solution, Chargehound can provide Braintree merchants with a completely scalable dispute process, eliminating tedious hours spent collecting proof of the transaction while helping to improve the chances for winning disputes.
To get started, you'll use the OAuth protocol to connect your Braintree account to Chargehound.1 This authorizes Chargehound to automatically receive all your relevant dispute data, such as shipping records, customer emails, purchase history, credit card checks, screenshots, and more.
Once connected, Chargehound uses Braintree's Disputes API to fully automate collection and submission of dispute evidence. The API gives Chargehound a clear pathway between collecting data and managing your chargeback disputes. Evidence like customer emails or screenshots that aren't stored in Braintree are automatically passed in via Chargehound's API integration.
But collecting evidence is just half of the equation. While the chargeback process can be automated on your end, it's important to remember that all that evidence will ultimately be reviewed by humans at the issuing bank or card network. This means the key to winning a dispute isn't just about collecting evidence -- it's about making your case.
To do that, Chargehound consults with merchant partners to understand what evidence is available for each type of dispute and get specifics about the transactions. Then the API automatically selects the right template from its available selection so that the right evidence is pulled.
After it collects everything it needs, Chargehound creates a compelling, human-readable document that clearly lays out the evidence in a way that best represents your supporting documentation. It then submits this dispute-response document, along with the evidence, to the bank on your behalf.
Together with Braintree webhooks, the Dispute API lets Chargehound know when a dispute is opened, won, or lost, allowing it to easily manage the process and determine which data to retrieve and submit.
The best part is that all this happens automatically in the background while you're doing your actual work. As soon as you receive a chargeback, Chargehound generates and submits the response for you -- no human intervention required. It’s worth noting that merchants have total control over their workflow, and it's custom for each merchant. Chargehound can submit over 250,000 disputes in one minute, so if a customer wants to submit 100% of their disputes then they certainly can (and many do). However, merchants can also set up rules and thresholds to decide what to dispute automatically, what to send to manual review, and what to simply accept. This can be done based on almost any factor -- reason code, fraud score, create a blacklist, etc.
Manage data sharing with Braintree's OAuth protocol
The Braintree OAuth protocol securely connects Chargehound with your Braintree account to authorize access to only the data required to view disputes and submit evidence.
This gives you peace of mind that Chargehound only has access to the information from your Braintree account that it needs, instead of all your data. OAuth keeps you, as the merchant, fully in control, eliminating the risk that could arise from providing universal access to your data. Not only that, but you can easily disconnect access at any time without hassle.
How HotelTonight scaled its chargeback process with Braintree and Chargehound
The booking app HotelTonight has already experienced success with Braintree and Chargehound. As one of the top hotel-booking apps available, its dramatic success meant an equally dramatic growth in chargebacks. Already a Braintree customer, HotelTonight began to look for a chargeback solution that offered the same scalable, frictionless experience.
"We needed to automate to get scale," said James Pierson, HotelTonight's director of payments and risk. "Chargehound was the only solution that fit our needs. The integration with Braintree made it simple, which meant we spent zero engineering resources to get Chargehound in place. It was a no-brainer."
By incorporating Chargehound with Braintree to fully automate and scale its chargeback process, HotelTonight was able to finally address 100% of its chargebacks while tripling its win rate, dramatically cutting costs from lost revenue. In addition, by automating the process, the company has been able to free up 80% of its chargeback team to work on fraud prevention -- a task where their expertise provides greater business value.2
Getting started with Chargehound
Chargehound has put together a comprehensive guide on how to integrate Chargehound and Braintree so you can get started automating your chargeback dispute process.