Back in late 2012 I launched ChargeBack.cc. This service accepted billing disputes from customers and delivered them directly to merchants, giving the merchants a chance to resolve the dispute before it reached the banks. If that failed, we would forward the dispute to their customer’s bank but at least we tried to close the communication gap. Sounds useful, huh? While this service managed to solve quite a few chargebacks, we hit up against a surprising critical problem that we didn't expect— many businesses completely ignore billing disputes!
After talking to a few merchants who didn’t initially respond to the disputes, we received common feedback. Billing disputes were so painful to resolve with so little chance of success, that the best course of action seemed to be to ignore them and let the banks handle them.
When a business can resolve a billing dispute directly with a customer and make them happy, many times that customer will turn around and become one of the business’s biggest advocates. If someone previously decided to hand money over to you, they've already decided that your service or product is valuable to them. To throw this away over a mis-communication is a huge waste. Most disputes can be resolved with a little bit of information provided at the right time. It’s this post-payment experience which separates companies like Zappos and enables them to have such a loyal following. Turning around unhappy customers should be a high priority for every company. But it isn’t. Because it’s just too damn hard. There isn't enough information or tools to do a good job of it.
This problem was so huge that we decided to scrap our original vision of tackling chargebacks head-on. Instead we wanted to deal with the underlying problem of making billing support work for customers and merchants. Something must be broken for things to be this bad.