American Express’ New Digital Receipts Should Help Reduce Chargebacks

One of the biggest causes of chargebacks is that people don’t recognize charges on their credit card statements and worry they’re the victim of fraud or identity theft. That’s because the transaction code on a credit card statement can look like someone face-planted on the keyboard and you would need a Ph.D. in cryptography to understand what it means.

Visa and Mastercard started solving this problem by creating digital receipts and enriching their transaction data so it’s easier to understand (and therefore remember).

Now American Express is following suit, launching their own digital receipts functionality. It gives customers a better look into specific transaction data, which in turn helps them avoid confusion and the fear that their card may have been compromised.

According to their press release:

. . .recent Amex Trendex data shows that 70% of U.S. consumers surveyed have contacted their credit card company over what they initially believed was a potentially fraudulent or inaccurate purchase on their card account, but in the end, was a valid charge that they or a family member made.

(Getting chargebacks on a charge a family member made is sometimes referred to as “family fraud.”)

American Express originally launched their Digital Receipts service with Apple and the App Store, Apple Music, Apple TV+, and other properties, but the feature is now available on purchases from “millions of merchants that process their payments through Square, as well as other large digital merchants including Google, Microsoft, and more.”

What’s more, they’re also using transaction information from partners Ethoca (Mastercard) and Verifi (a Visa company), using Ethoca’s Digital Receipts and Verifi’s Order Insight.

What’s included on AMEX’s Digital Receipts?

American Express digital receipts Cardholders will see data like the merchant’s name and logo, the date of the order, order number, and products purchased. This will all be available on the American Express website or app.

According to an article on PYMNTS.com, this will help cardholders recognize legitimate purchases, which will reduce the frequency of calls confirming the details of their digital transactions. This will also reduce the number of disputed charges and chargebacks.

American Express launched digital receipts after surveying U.S. cardholders and merchants. What they found was not that surprising, but it should help everyone understand the scope of the problem.

According to the survey results, cardholders said Digital Receipts would help them:

  • More easily distinguish legitimate vs. fraudulent charges on their card account (81%).
  • Improve their overall customer experience (75%).
  • Make them less likely to dispute a charge (72%).

On the other side of the counter, merchants said Digital Receipts would help:

  • Improve customer satisfaction (78%).
  • Help avoid unnecessary disputes and chargebacks (79%)
  • You can see that both customers and merchants feel they can benefit from American Express’ Digital Receipts, which makes us wonder why it’s taken so long for this offering. Who knows how much time and money could have been saved if these had existed just a few years ago?

    We can actually get answers to that question. We’d love to see how programs like Ethoca, Order Insight, and the new Digital Receipts are helping merchants. We’d like to see how much the numbers and percentages of chargebacks have been reduced, and what kind of impact this has on both friendly fraud and malicious fraud. It’s all measurable just by counting the number of calls that come in, tracking the amounts of the transactions, and even doing a year-over-year comparison of chargebacks, refunds, and disputed calls.

    We’re very optimistic about all of these programs, so much so that our CB-ALERT solution even uses Ethoca’s and Verifi’s programs to help our merchants fight chargebacks and friendly fraud. If you’d like to learn more just visit our website or call us at (866) 987-1969.

    Photo credit: Photo provided by American Express