Introduction

In previous blog posts, we discussed dealing with chargebacks, a growing concern for online businesses across all industries. We explored the complexities and regulations of chargebacks and refunds stemming from credit cards, PayPal, and other payment methods’ transactions. Our helpful guides introduced game industry-specific trends and tools for dealing with the impact on your growing business. The most comprehensive approach to mitigating this revenue loss—Mastercard anticipates chargeback volume to reach 337 million by 2026—a 42% increase from 2023—is to build a proactive strategy that tracks, examines, and resolves chargeback requests from players' financial institution or card issuer and helps prevent disputes from occurring in the first place. This post takes a closer look at the dispute management process when you partner with a Merchant of Record — what it means for your game, how to put preventative measures in place, and skillfully navigate the complexity of battling potential fraud. Why chargeback management is critical for your business Chargebacks are a major headache for the video game industry. According to Mastercard, In 2023 alone, they cost the industry over $1 billion. Keeping your game-related sales profitable relies heavily on the right tools, processes, and best practices for preventing and fighting chargebacks. Here are four reasons why:

1. Fraud prevention is essential to verify your customers’ identities before they make a purchase, meaning you need a way to check if they are who they claim to be. Proactive fraud security helps fraudsters from stealing accounts and making unauthorized purchases.
2. A strong payment reconciliation policy reduces errors and confusion post-billing and protects your game’s revenue. By having clear procedures in place, you can minimize errors and disputes that can arise after purchase, including verifying transaction records to prevent issues like double billing or other clerical errors.
3. Solid accounting procedures reduce financial records complications, create solid reporting data for tracking performance, and help identify trends you use to make data-driven ecommerce decisions.
4. Dispute management is key to a higher net win rate in the competitive world of video game commerce. A hefty chargeback rate can negatively impact your reputation, revenue, and even your ability to partner with payment processors. The main issue lies in the complexity of the chargeback process, with varying rules, timelines, and evidence requirements. You can significantly raise the win rate by proactively preventing disputes and effectively combating false ones.

Ways to handle a dispute Now that you understand why you should pay close attention to potential fraud and customer disputes let’s review the top ways to boost your overall net win rate.

• Data. Level up your chargeback defense with data analytics. By analyzing patterns and trends in chargeback data, you can identify potential issues and take preventative measures.
• Automation. Let automation handle the repetitive and tedious work. Automated anti-fraud and dispute management systems can streamline the process, reduce manual errors, and ensure timely responses to chargebacks.
• Evidence Gathering. Collect and organize evidence like a fraud prevention pro! The more data you have on your side, the stronger your case will be against false disputes.

Chargeback management strategies Game developers have 2 approaches to dealing with chargebacks: internal dispute management or outsourcing to third parties.

1. Internal dispute management involves setting up a dedicated team within your organization to handle chargebacks. This approach requires significant investment in hiring experts, training, and developing or purchasing specialized software.
2. Outsourcing to third-party services or payment service providers (PSPs) offers a more streamlined chargeback management solution. Some providers provide dispute management as an add-on service but can incur additional fees and development costs.

Your best bet is to engage the help of a Merchant of Record (MoR) that includes dispute management as an integral part of its core services —a ready-to-integrate solution without the demand for extra fees and the need for additional coding. Look at these business factors carefully to ensure you choose the approach that best suits your game and your company’s needs.

• Resource availability. Do you have the internal resources to manage chargebacks effectively?
• Cost. How much are you willing to invest in chargeback management?
• Expertise. Do you have the necessary knowledge to handle disputes?
• Scalability. Can your chosen solution handle your business's growth?

Given the many challenges a busy game studio already faces, it makes sense to partner with an MoR who understands the industry and offers comprehensive chargeback management that doesn’t harm the bottom line. Xsolla Dispute Management As your devoted Merchant of Record, Xsolla understands that fraud can be a major headache for game developers. That's why our Anti-Fraud product features three layers of protection to safeguard your revenue. Our advanced system helps prevent fraudulent transactions and minimizes chargebacks, ensuring your game remains profitable. Xsolla’s dispute management service is critical to our partnership with developers. Our team of experts handles chargebacks for over 10 payment methods, saving our partners hundreds of thousands of dollars each year. In 2023 alone, we managed 190,000+ chargebacks, maintaining an above-average win rate of 68% compared to the Ecommerce average win rate of 40%. Our previous blog post explains why win rates matter. Because we believe in providing our partners with complete transparency, control, and flexibility, our Xsolla Publisher Account offers real-time analytics for greater insight into chargebacks. This allows you to track trends, identify potential issues, and take proactive measures to protect your sales revenue. Choosing a game-changing partner for your business At Xsolla, we go beyond handling chargebacks for just bank cards and PayPal. Our dispute management service is here to help. As an included part of our comprehensive Anti-Fraud product, this service offers:

• No hidden costs —it's included in your existing Xsolla fee
• Expert support —our dedicated team is always ready to assist
• Full transparency —monitor all disputes directly within your Publisher Account
• Your reputation is safe —our service and team protect your brand, financial health, and players' trust and confidence. We prioritize keeping the chargeback rate as low as possible and effectively fighting disputes.

Get started reducing risk

Xsolla’s team is equipped with the latest techniques, tools, manual review, and automated processes to ensure timely chargeback resolution and a competitive win rate. Keep watching for our upcoming blog post to find out how Xsolla dispute management service can benefit your business’s bottom line. Set up a meeting with one of the Xsolla experts to learn how Xsolla’s Dispute Management can help you grow your business and overcome complexities and risks associated with chargebacks. Visit our website to learn more about our solutions and services and how you can empower your game to reach its full potential.

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1Mastercard study March, 2024