Chargebacks aren't just a cost of doing business. They directly threaten your revenue and ability to process payments. The actual cost of a chargeback can be two to three times the original transaction between bank fees, lost sales, and penalties.
Chargebacks can erode as much as 40% of your revenue without a solid plan of attack. Worse yet, too many chargebacks put you at risk of VAMP qualifications, processor fees, and even account termination.
The reality is simple: you can't ignore chargebacks. Effective chargeback management isn't optional if you want to protect your bottom line and stay competitive. The question is: should you build an in-house team or outsource to a chargeback company?
Here's a closer look at the key considerations.
Many merchants start by handling chargebacks internally. This approach can make sense early on when volumes are manageable. But as your business scales, so do the complexities.
If you're considering keeping chargeback management in-house, think through these factors:
Keeping chargeback operations internal can offer greater control over sensitive data. You decide who has access to what.
An in-house team's capacity can fluctuate with staffing changes, seasonality, and workload, creating gaps in coverage, especially when quick turnaround times are critical for dispute responses.
Sometimes, deciding to stay in-house isn't operational - it's emotional. If you're reluctant to part with familiar processes, tools, or team members, make sure sentiment doesn't outweigh strategy.
How well do you understand your chargeback landscape? Knowing your dispute rates, win rates, and financial impact is essential. Without specialized systems, getting this level of visibility can be difficult for internal teams.
At first glance, in-house might seem more affordable. But beyond salaries, factor in training, software, tools, and the opportunity cost of pulling your team away from other priorities.
Partnering with an expert chargeback company can help you scale operations, leverage specialized tools, and improve outcomes. While it may involve a more considerable upfront investment, the long-term ROI can be significant.
Here's what to consider when evaluating an outsourcing option:
Chargeback management is complicated. It requires a deep knowledge of evolving card network rules, regulatory changes, and industry best practices. A qualified partner brings specialized expertise that's hard to build internally.
An outsourced provider can offer consistent coverage regardless of season or staffing changes, keeping you compliant and competitive while handling disputes within tight timeframes.
The right partner brings robust technology: real-time dashboards, advanced analytics, automated workflows, and seamless integrations with your CRM, gateway, and processor.
Top providers don't just fight disputes; they help you understand why chargebacks happen in the first place. You can prevent future losses and maximize your revenue recovery with the right insights.
An outside perspective can offer valuable insights, from identifying customer journey vulnerabilities to strengthening fraud prevention strategies.
There's no one-size-fits-all answer. Your business, your chargeback challenges, and your growth goals are unique.
An in-house team can offer more control and lower upfront costs. An outsourced partner can deliver expert guidance, scalability, and long-term performance improvements.
What matters most is the right system to reduce disputes, protect your merchant accounts, and drive sustainable growth.
At MidMetrics, we make managing chargebacks simpler, more intelligent, and more effective. Our platform combines real-time dashboards, advanced analytics, and on-demand reporting so you can monitor chargebacks, act faster, and protect every MID without guesswork.
Ready to see how MidMetrics can help you stay ahead? Get in touch with us today.