Jack Welsh, former CEO of General Electric, wrote “Don’t own a cafeteria: Let a food company do it. Don’t run a print shop: Let a printing company do that. It’s understanding where your real value add is and putting your best people and resources behind that. Back rooms by definition will never be able to attract your best. We converted ours into someone else’s front room and insisted on their best. This is what outsourcing is all about.”
Outsourcing of chargeback management should be a strategic question for any online business. Chargebacks must be be tracked and understood as a key metric to understanding the overall health of your company. Chargebacks destroy operating margin and create a clear and present danger for any company. Let’s consider the most important point in Jack Welch’s statement, “insisting on their best.” Think about this—If you can truly achieve “your best” you always win. Your tomorrow becomes better than your yesterday.
Chargebacks are the last stage in the fraud cycle and are usually an indicator of funk. You may have problems with your customer service policies, handling, or outsourcer, your shipping policies, return policies, or your billing descriptor, or perhaps the very product or service you sell. Wouldn’t you want all the intelligence you could gather in order to improve your company?
During the chargeback representation process much intelligence is gathered. The compelling evidence requirements set forth by the credit card schemes demand detailed information about each customer transaction. When you represent thousands of transactions, you can, and should, end up with killer trending data. You should gather, aggregate, and use this information to improve your product, service, and internal business processes. It’s unlikely your accounting or finance team will have the expertise to share and collect this information, let alone have the motivation or inclination to do so.
Returning to Jack Welch’s comments on outsourcing, “their best” is the key point here. When it comes to chargebacks, does your internal team have the specialization necessary to deliver “their best?” You will always see better results from a specialist. This is the very reason you hire a tax accountant for specialized tax work. Your finance and accounting teams are great at accounting, but chargebacks are usually an afterthought. Does your internal team even know which chargebacks to fight? Perhaps you are thinking, I already hired a chargeback outsourcer and I get little to no intelligence from them. Here’s my advice: demand “their best” or fire them, otherwise your outsourcing strategy is in vain and your tomorrow will suck.
If you are considering a chargeback outsourcer, drop us a line at firstname.lastname@example.org. In almost every instance we can provide better service at a price well below your internal staffing costs. We have a 100% satisfaction guarantee—and will always deliver “Our Best.”