Rapidly growing fintech startup Melio anticipated that chargeback problems would be the cost of their success. They also wanted to minimize distractions and focus on scaling up core operations. Consequently, Melio decided to proactively pursue a strong success rate in fighting chargebacks. Justt’s tailor-made, hands-off solution fit the bill. Starting in February 2020, Justt took over Melio’s chargeback defense and drastically improved their results, including:
85.5 percent of chargebacks reversed – a 54.5 point lift.
$376,000 in revenue loss avoided over the first 12 months.
All done while managing a caseload that grew 345% YOY as Melio dramatically increased its revenue and scaled up operations.
Chargebacks – the price of success?
Part of the appeal of Melio’s solution is that it lets small businesses pay vendors with their credit cards, which led its monthly active users to grow in 2020 by more than 2,000 percent. But as its user base grew so did its chargebacks. Melio had a risk team that was busy fighting other types of fraud and was getting distracted fighting illegitimate chargebacks, something that was outside its real area of expertise. However, the average chargeback amounts were large enough that the company couldn’t just ignore them as the cost of doing business. Melio’s risk team wanted to refocus on its core mission to support the company as it grew, but they also needed to increase the number of chargebacks they successfully fought. Building a separate chargeback analyst team with the required expertise and training and development didn’t seem like an attractive option for a rapidly growing startup.