Background: Nike.com is an increasingly important channel for Nike, and it’s where the company sells a lot of limited edition and customized products. The fact that many of these products are in high demand and have great resale value makes nike.com a vector for fraud and abuse of chargeback rights, and despite their use of sophisticated fraud detection software, the company receives about 1000 chargebacks per day. Many of those disputes are bogus, and the lost funds are recoverable if the company can return a compelling legal brief that undermines the claims in the dispute. For example, it’s common for cardholders to place big purchases with their own credit cards, then lie to their bank, claiming that their card was stolen.
Problem: Despite having a staff of more than a dozen people, when we first engaged with Nike, the time-consuming nature of dispute resolution meant that their staff was only able to deal with about half of each day’s disputes, leaving the rest to expire with no response, losing several million dollars per month.
Solution: I worked closely with Nike in order to understand their specific data aggregation and workflow challenges, and working in concert with their dispute analysts, we rolled out the Chargeback App. It has three major components: data aggregation, an expert system, and automated response generation and transmission. The platform saved the team many hours of tedious and error-prone data entry and reduced training time. Within three days of onboarding, the team was working 100% of incoming chargebacks, and was able to reallocate some of their staff to higher-value tasks. Nike ended up being an important reference customer, and recommended our services to many other companies in the sporting goods and apparel space.