Appliances and gadgetsHow an E-Commerce Brand Slashed Its Chargeback Rate by 69% in 12 Months

NAOS CX deployed a dedicated risk management team — cutting dispute rate from 2.97% to 0.92% and protecting nearly $1M in annual revenue while the business scaled +63%.
Industry: Appliances and gadgets + subscription to warranty MARKET: USA, Canada, Australia & UK Timeline: 12 months (01/2025 to 01/2026)

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DISPUTE RATE
From 2.97% to 0.92%

~01234567890.01234567890K

DISPUTES AVOIDED YoY

~$01234567890M

REVENUE PROTECTED

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CHARGEBACK DISPUTES WON

Client Profile

Industry: Appliances and gadgets
Business Model: DTC Subscription (Recurring Billing)
Market: USA, Canada, Australia & UK
Revenue Scale: $2.5M–$4M/month
Payment Processors: Adyen, Maveric, PayPal, Stripe

The Challenge

The client came to NAOS CX with a chargeback problem that was threatening their ability to keep processing payments:

Chargeback rate of 2.97%, more than 3× the standard processor threshold, putting the merchant account at risk of termination.
Only 10% of contested chargebacks were being won, meaning 90 cents of every disputed dollar was walking out the door.
No structured process to intercept risky orders before fulfillment: the most preventable chargebacks were going unchallenged at source.
Slow, reactive responses. Evidence was submitted manually, leading to missing windows and lost winnable cases.
Escalating financial exposure: each chargeback received triggered a non-refundable processing fee, in addition to a fine and the full order refund for every lost case.

E-COMMERCE SERVICES

Our Approach

A lean 4-agent Risk Management Team — operating on half-shifts for maximum coverage — was deployed with a dual mandate: prevent chargebacks from being filed in the first place, and win a far higher share of those that are.

INTERCEPT

Stop the riskiest orders before they ship. We flag orders automatically when they contain unverifiable addresses. These orders go on hold before fulfillment — eliminating the most common source of non-delivery disputes before they can happen.

VERIFY

Human review where automation stops. The Risk Management Team calls customers to confirm order details on held orders. This manual layer catches what automated rules cannot.

COMMUNICATE

Proactive outreach to prevent frustration from becoming a dispute. For delays (out-of-stock situations, carrier issues), the team contacts the customer. They offer a concrete resolution: a discount in exchange for accepting a new delivery date. A customer who feels heard never files a chargeback.

CONTEST

Fight every contestable chargeback with structured evidence. For chargebacks that do get filed, the team submits standardized dispute files: transaction records, delivery confirmations, communication history, and signed T&Cs. Templates and protocols are pre-built and allow a fast response.

TRACK

Data closes the loop. Every dispute (filed, contested, won, lost) is logged by platform and root cause. Monthly reporting feeds back into the INTERCEPT and VERIFY steps, continuously narrowing the gap.

NAOS CX approach to manage the chargebacks and disputes risks of our ecommerce clients

THE RESULTS

After 90 days with
NAOS CX

By shifting from reactive management to proactive prevention, the brand achieved significant improvements in both risk metrics and top-line growth.
We consider here both direct and indirect costs (direct chargeback costs: lost transactions + chargeback fees / indirect chargeback costs: operational overhead, COGS, processor penalty, lost CAC, opportunity cost)

Metric	Baseline (Jan 2025)	Result (Jan 2026)	Change
Monthly Order Volume	20,800	34,037	+64%
Monthly Revenue	$2.47M	$4.03M	+63%
Total Disputes	617	313	-49%
Chargeback/Dispute Rate	2.97%	0.92%	-69%
Chargeback/Disputes win rate	10%	30%	+300%
Average Order Value	$118.6	$118.4	Stable

69% reduction in dispute rate 3,650 disputes prevented yearly ~$440K of direct chargeback costs avoided in one year +additional ~$885K of indirect costs saved

” NAOS CX transformed our dispute management from reactive firefighting into a proactive prevention system. Their team didn’t just reduce our chargeback rate — they protected our merchant account and enabled us to scale confidently.”

—Head of Operations/Risk Management — E-Commerce
Brand (USA) — anonymized

NAOS CX helped us unlock revenue we didn’t even realize was sitting inside our support calls. And they did it without compromising customer experience.

Head of CX — DTC Apparel Brand (USA) — anonymized

CONCLUSION

What This Means
for Your Brand

Prevention beats reaction every time

The cheapest chargeback is the one that is never filed. Intercepting risky orders before fulfillment — through automated Shopify holds and manual verification calls — eliminates the most unwinnable case types before they ever reach a processor.

Representation is a skill, not a task

Going from a 10% to a 30% win rate did not require more people. It required structured evidence packages, processor-specific protocols, and consistent submission speed. The cases were always there to be won.

Scale without scaling your risk

Revenue grew +63% while chargebacks actually paid fell -61%. With the right operational framework, growth does not automatically mean higher chargeback exposure.

Small team, structural impact

4 agents working half-shifts generated ~$440K in avoided direct chargeback costs annually. The ROI is not linear — it is systemic. And it protects the merchant account that makes all other growth possible.

CONTACT NAOS CX