Do you need help winning more chargebacks? If so, you won't want to miss this episode of Subscription Box Answers! Join me as I sit down with Michael Zavet, CEO of Shieldify, to delve into how their AI-powered solution is revolutionizing the way businesses tackle chargebacks. Shieldify not only protects businesses from unwarranted chargebacks but also boosts their success rate in winning disputes.
There's nothing more frustrating than friendly fraud, where customers exploit loopholes to essentially steal products and then charge the company back. Although only a small number of people engage in this, it's crucial to have measures in place to protect your business, as the costs and time needed to investigate and contest each chargeback can quickly accumulate. Thankfully, Shieldify simplifies this process, potentially saving your business both time and money. We started using Shieldify a few months ago following a recommendation, and the results have been very impressive. They're helping us win more chargebacks, which is saving us money and time.
In this episode, we'll dive deep into the topic of chargebacks, and Michael will share some valuable tips on how to increase your win rate. You can learn more about Shieldify at https://shieldify.com/. If you have any questions you want answered on the show, head over to www.SubscriptionBoxResources.com, join our free Facebook group, and post them there.
Do you need help winning more chargebacks? If so, you won't want to miss this episode of Subscription Box Answers! Join me as I sit down with Michael Zavet, CEO of Shieldify, to delve into how their AI-powered solution is revolutionizing the way businesses tackle chargebacks. Shieldify not only protects businesses from unwarranted chargebacks but also boosts their success rate in winning disputes.
There's nothing more frustrating than friendly fraud, where customers exploit loopholes to essentially steal products and then charge the company back. Although only a small number of people engage in this, it's crucial to have measures in place to protect your business, as the costs and time needed to investigate and contest each chargeback can quickly accumulate. Thankfully, Shieldify simplifies this process, potentially saving your business both time and money. We started using Shieldify a few months ago following a recommendation, and the results have been very impressive. They're helping us win more chargebacks, which is saving us money and time.
In this episode, we'll dive deep into the topic of chargebacks, and Michael will share some valuable tips on how to increase your win rate. You can learn more about Shieldify at https://shieldify.com/. If you have any questions you want answered on the show, head over to www.SubscriptionBoxResources.com, join our free Facebook group, and post them there.
Welcome to Subscription Box Answers with your host, liam Brennan. You're no rubbish, no crap. Straight to the point podcast with real, actionable tips, real strategies and insights from the industry which will help you start and grow your own successful subscription box business. You ask the questions, you ask the questions, you ask the questions. Liam gives the answers. It's as simple as that.
Speaker 2:Welcome back to another episode of Subscription Box Answers. Today I'm delighted to announce we have a very special guest. We have Michael Savette, who is the co-founder and CEO of sharedefoycom. How are you, Michael, and thanks very much for coming on the podcast.
Speaker 3:I'm doing greatly. I appreciate you having me on, no problem at all.
Speaker 2:I'm really excited to chat to you because we're actually a customer of Shieldify in BusterBox, so very excited to bring you on and talk about chargeback management. So what is Shieldify first of all? So everybody listening knows.
Speaker 3:Yeah, so, fundamentally, shieldify is what we like to call a next generation chargeback management platform. So we've taken, you know, the latest technology, particularly leveraging the advances in AI, to allow merchants to more effectively manage and dispute their chargebacks, their chargebacks. So when you think about a chargeback, which is generally a customer calling into their credit card company and saying either they don't recognize the transaction or this isn't what they signed up for, well, our job is to collect as much evidence and show, for the merchant's benefit, that, in fact, the customer did know what they were signing up for and that the merchant delivered.
Speaker 2:Yes, and I think the service you've come up with is completely genius, because this tends to be more of a problem in the direct-to-consumer space and particularly with subscriptions, where you will get a very small percentage of people now, thankfully, who know the law inside out when it comes to chart not the law, but you know the processes inside out when it comes to chargebacks and they basically know how to flag chargebacks. So what, what actually drove you into this? What gave you the idea to come up with share the fight yeah, that's a great question, liam.
Speaker 3:And going back to you know, as you mentioned, it is a huge problem in e-commerce broadly, particularly in direct-to-consumer and even more so for subscription businesses.
Speaker 3:So I had myself a subscription business, direct-to-consumer.
Speaker 3:We were focused in the supplement space and we grew super rapidly and along with that, of course, came chargebacks.
Speaker 3:Now, in a worst case scenario for a merchant, what happens with chargebacks is that ultimately, your payment processor could drop your account and in a very, very worst case scenario, what will happen is that MasterCard or Visa can flag you and there's usually little to no warning about this happening.
Speaker 3:When they flag you, they can execute what's called the TMF, which stands for terminated merchant file. Essentially, mastercard and Visa will say to every payment processor globally they'll put you on a blacklist and say this company cannot attain payment processing. Now, as a subscription business, not only are you losing your access to processing which maybe, if you find a solution and get creative, you can get back running but you lose all of your subscribers and that for many companies is an extinction level event. So naturally, with my journey, we unfortunately experienced this firsthand and that's what inspired me to get into the space and help merchants mitigate that ever happening to them, because the feeling of being TMF and the feeling of losing all your hard work for subscribers is just, you know, it's just the worst nightmare, complete nightmare, and thankfully now I haven't heard that happen to too many people in this space.
Speaker 2:I know in some other industries and stuff I have heard it regularly enough, but that's absolutely crazy that, uh, something like that can actually happen and it's something people really need to be aware of and they need to be on top of. We had a member of our staff managing our chargebacks internally in buster box and we trained them up and he was running that for a few years and then, obviously, we were introduced to yourselves and john roman from battle box also recommended you. He was like yeah, you have, you have to try this. It will make such a big difference. So we obviously we signed up for Shieldify a couple of months ago now. Yeah, we're blown away by how good it's been so far.
Speaker 3:Yeah, I appreciate that, and so there are really two sides to this coin, right? I mean, of course, everyone should be weary of this extinction level event which, by the way, it can happen to any size business, from large to mom and pop sort of small businesses that have done nothing out of line to just get hit with it. But on the flip side it's also the way I look at chargebacks for a merchant is that you've worked hard for this revenue and in a sense, it's sort of like being stolen from. What we call friendly fraud is the majority of chargebacks, and the reason it's called friendly fraud is that it's not outright fraud, although it's treading a very, very thin line where customers have this advantage whereby they can essentially flag just about any transaction and call it a chargeback, and it's up to you as the merchant to prove that it's not. So you're guilty until proven innocent. What that ends up converting to is simply loss from your bottom line.
Speaker 2:Yes, and I just want to make one thing clear to you your service and Awesome Bo BusterBox we're not like if there's a genuine reason someone has filed a chargeback, that's completely different and that should be a consumer's right too. If you're actually not delivering a service and the great thing about yourselves is you actually look into all the evidence and if you're like, oh, that's actually like something to do with the company that got lost or whatever, that's fine. We're not trying to. We're not trying to actually like win them chargebacks. We're trying to win chargebacks where people are signing up and they're essentially robbing the product. They're stealing the product because they know the rules inside out and they know how easy it is to actually flag it with the bank. What will be the main chargeback reasons that you come across?
Speaker 3:Yeah, so I mean that's a very good point. We do look for transactions and we do our homework on each and every charge, back or not. In most cases they're not, but there are a lot of cases where we see that something happened, where maybe the customer is double billed or perhaps the order wasn't delivered or they did receive the wrong product, in which case the value out of ours is to let the merchant know that this has happened and they should do some damage control with the customer and try to salvage the relationship, which is, of course, very important to merchants. The most common chargeback categories we see overall are product not satisfactory, so it's the customer saying that they don't like the product for whatever reason, and oftentimes that's a little bit of a tough argument for the customer because they knew exactly what they were purchasing and they don't really explain in filing a charge back why it's unsatisfactory. Other ones may be product not received, in which case we'll go into the shipping data and try to prove that product was in fact received. Most shipping companies keep a very good record of that, so those are primarily like the two that we see most commonly.
Speaker 3:Others may be something along the lines of you know, the price wasn't exactly what they had signed up for, or that they didn't know that they were on a subscription, which is, you know, of course, very relevant to BusterBox, but, as you know, with BusterBox and with is, you know, of course, very relevant to BusterBox, but, as you know, with BusterBox and with any you know tightly run subscription company, there are steps before the customer checks out to very much, let them know that they have subscribed, and these customers often know that, but they simply forget. And then they see the transaction a few months later and it's been a few months of, you know, paying for this product or service and all of a sudden they say, oh, I didn't mean to, and this is a very common thing we see oh yeah, 100, and I hear that a lot from my friends and other people in the industry who are running similar businesses and to my own.
Speaker 2:Now we're obviously on Subli and your service works absolutely perfectly with Subli, but as far as I'm aware, you can plug into pretty much anything, can't you?
Speaker 3:That's correct. Yeah, we work with any type of CRM, any type of payment processor, so you know, our sort of range with merchants is very broad. We can take on just about any company on any platform. We frequently work with Shopify merchants and WooCommerce merchants. We love Subli merchants, Subli obviously being, you know, a subscription-focused platform. We see a lot of value to our merchants there. But yeah, essentially we can take on anyone.
Speaker 2:That's great because I know people who are listening to this. They might be like, is this compatible with my platform? But I'm glad you cleared that up. So for anybody listening right say, if they don't go with Shieldify and they're like, okay, I'm just going to manage this in-house, I'm going to continue to manage this in-house. What tips could you give people to help them win chargebacks, to improve their win rate?
Speaker 3:So there are a few things that we see right off the bat that merchants can do to really improve their chances of winning chargebacks. One of those things is having very solid terms and conditions that outlines your deliverables as well as the customer's rights, because you can point to those later down the road when a chargeback and if a chargeback does materialize. Another thing is having good customer service and being diligent. We see things like, for example, a company may offer a customer a refund via email or whatever customer service platform they're using, but then not follow through that refund. So being diligent and having whatever customer service platform they're using but then not follow through with that refund. So being diligent and having good customer service is also super important and overall, just keeping records. So if a customer has to sign off on something or check a box, make sure that you have all of that handy for when a chargeback does materialize.
Speaker 2:Yeah, they're great tips and I know what's quite common for people who run prepaid subscriptions will be. I've heard this a few times they sell stuff at Christmas time and then in the new year maybe those potential, some of those customers are actually looking to steal stuff and suddenly need a cash injection into their bank account and then they'll go and they'll run chargebacks on the prepaid. And I think it's actually disgusting when they do this, because a lot of the time these are smaller subscription box companies and they've already like they need that revenue basically to keep operating. They've put it to the side to fulfill boxes, whatever their plans for the revenue, and then suddenly, out of nowhere, a few months later, they're hit with this chargeback, which is, a lot of the time, complete rubbish. What kind of advice would you give to merchants who find themselves in a position like that?
Speaker 3:Yeah, unfortunately this is sort of with card not present transactions.
Speaker 3:You know customers are rarely thinking about the impact to the merchant and that's just sort of the name of the game.
Speaker 3:A few ways to mitigate that is, you know, make sure that your marketing is very concise and direct, is very clear, so that there's really no debate when it comes time to, you know, fight a chargeback about.
Speaker 3:You know whether or not the customer understood what they were getting into. So you know a lot of these subscription purchases you know need to act somewhat like contracts and you need to have the backup which comes from, you know, good record keeping diligence and having the proper steps in place to ensure that. You know good record keeping diligence and having the proper steps in place to ensure that you know you can then later show that the customer understood exactly what they were purchasing. And again tying back to the marketing, you know sometimes marketing can be somewhat accidentally misleading and that's you. That's a very common thing in the subscription space where it's not the merchant's intention to do so. But sometimes you know you kind of focus on getting the customer through the door and so having that good messaging in place is very important to ensure that a customer doesn't come back later and say, oh, I didn't understand what I was getting into.
Speaker 2:Yeah, yeah, definitely. I agree 100%. You basically need to have yourself covers from all angles so if the chargeback does come in and you'll win it pretty much because you can demonstrate the whole customer journey. So, in regards to shieldify, what size subscription box business would be a good fit for yourselves?
Speaker 3:yeah, so I mean today we were working with companies of all sizes. You know, our smallest merchants do a few million in revenue a year and our largest merchants do over a billion in revenue a year, and that's a huge delta. But at the stage that we're at and being, you know even how card issuers or processors behave with different types of merchants. So for us, no size is too small, so to speak, or too big. We're happy to take you on if you've got a problem with chargebacks, and we love seeing a difference. So that's an added bonus for us.
Speaker 2:Very good, and what I really like about Sharedify is it can actually save you money in the long term. Do you want to talk about that? Because it's a great incentive that really makes it a no-brainer to sign up.
Speaker 3:Absolutely yes. So our entire goal is for there to be an ROI for using our product and the way we look at it. So we have two billing models. The first is 25% of revenue recovered and the second is 15% of revenue recovered with an added platform fee of $300. Now, oftentimes merchants are statistically doing around 10 to 15% win rate. On the high end they go up to 25%. That's internally Our win rate. On the high end they go up to 25. That's internally our win rate ranges anywhere from on the very low side, 40, but we're averaging above 80 percent with across all merchants right? So ultimately, when you factor in the revenue that we take from our fees, um, you only need to improve that win rate for the merchant by about sub 10% for it to make financial sense.
Speaker 3:So in every case for us so far, we've shown actual return of value to our merchant and it's risk-free return because we don't get paid unless we're winning. We don't get paid upfront in many cases. So we are very much incentivized to recoup that revenue for the merchant and besides that, there's a massive time saving for the merchants. And besides that, there's a massive time saving for the merchants as well Because you know, as you know, busterbox has had someone on chargebacks. You know working through them individually and it takes an average person about 90 minutes to complete a single dispute because you're jumping from platform to platform your CRM, your payment process process or your 3pl. This is very time-consuming stuff and then compiling a quality pdf or dispute report or package is very time consuming in itself as well. So there's kind of the two sides to the equation one, we want to make financial sense for the merchant, but two, we hope to save the merchant quite a bit of time, which is, you know, time is money these days yeah, I, I love the business model.
Speaker 2:It makes it absolutely no-brainer for anybody really with any kind of um direct to consumer company to try out. You're basically risking nothing. There's only really the upside you don't have to deal with chargebacks anymore and ideally you will actually be saving money um long term, and we're definitely starting to see that now in buster box. So I'm definitely very happy with the service. Well, look, thanks very much for coming on. I really, I really appreciate it. If anybody listening wants to try share the fight, where can they go?
Speaker 3:yeah, absolutely. I really appreciate you having me on first of all and look forward to continuing working with BusterBox. If you'd like to find us, we can be found at wwwshieldifycom. Also, feel free to email us directly at info at shieldifycom.
Speaker 2:Perfect. Thanks very much. We will be back next week at the exact same time. If you have any questions you want answered on the show, as always, head over to subscriptionboxresourcescom and join the free Facebook group and post them there. Thanks very much and chat to you next week. Bye-bye.