How Dropship.io reduced chargebacks by 91% & increased revenue by 5% with Chargeback

The Challenge

Dropship.io is the world's leading e-commerce platform for dropshipping. It’s the sister company to Chargeback and operates as a B2C SaaS.

Chargeback was initially developed to address chargeback issues specifically for Dropship.io. 

However, due to increasing demand, we decided to make it accessible to the public. The journey has been quite interesting. 

Before:

Initially, 87% of payments were processed through Stripe, with a chargeback rate of 0.86%. This number was not comfortable for anyone because Stripe could give us issues at any moment. 

Reducing the chargeback rate was our primary concern and main objective for improvement.

Our Goals:

• Reduction of Chargebacks:
  • This protects the company from potential fees or restrictions from the payment processor, in this case, Stripe
  • Less time the team has to spend managing disputes‍
• Accepting More Payments:
  • Increase our capability to accept more high-risk payments
  • This was constrained by the risk of being classified as a high-risk merchant by Stripe. (Such a classification could lead to account suspensions, fees, and money holds.)

Summary: The main goal was to reduce the 0.96% chargeback rate to safeguard against a potential Stripe shutdown

The Solution

Since Dropship.io received payments worldwide, we enrolled all available prevention services. 

This included Ethoca, RDR, and CDRN, which allows us to prevent as many chargebacks as possible. 

Given that the average order value (AOV) was below $50, we implemented automatic refunds for all alerts. In other words, every incoming chargeback was refunded, regardless of the order value.

This approach was more cost-effective than fighting the chargebacks. It also reduced the time the team spent responding to disputes.

Additionally, we set up Slack, enabling real-time alerts and updates about ongoing activities. Ensuring everyone stayed well-informed about what was happening. 

Summary: The solution was integrating with Stripe and quickly activating all our prevention tools.

The Results

24 hours of turning the alerts on, this happens: 

• The chargeback fell by 91%. From 0.86% to 0.07%
• Dropship.io could accept 4% more payments. Increasing the revenue by 5%
• 6x ROI in increased revenue compared to the cost
• They saved 4 hours per week in work responding to chargebacks

Summary: The result was a 5% increase in revenue and a 91% reduction in chargebacks, giving a 6X return on investment.

About Chargeback

Chargeback is a leading chargeback prevention service. Setup takes just 2 minutes, and you can go live within 12 hours.

We guarantee reduced chargeback rates, and you only pay per chargeback prevented. Ensuring you get value for every penny.

Discover how Chargeback can protect your business. Book your free demo today.

Note: Dropship.io and Chargeback are sister companies and have the same owners. However, this doesn’t affect the results Chargeback achieved for Dropship.io.