We all make mistakes. From a merchant’s standpoint, that could mean making mistakes with dispute management, measuring a team’s progress and providing quality to chargeback responses. What can make this matter worse is not knowing when a mistake is made. That traps us in continuously making that mistake over and over again without showing any signs of improvement. Unfortunately, we are the least reliable source in spotting our own mistakes since we tend to overestimate our least-knowledgeable skillsets, according to David Dunning and Justin Kruger.
These two psychologists call this phenomenon the Dunning-Kruger effect. This effect is framed by two common traits that explain our bias to overestimate ourselves. The first trait is people reach poor decisions after a mistake has been made. The second trait, which solidifies the Dunning-Kruger effect, is the inability to notice knowledge gaps in order to correct the mistake. This suggests that poor performers lack the expertise needed to recognize how bad they are performing, according to German Lopez from Vox.
What makes this effect interesting is that it is not a result of our ego or self-esteem. Instead, it is a result of not knowing when to seek others for feedback and self-improvement.
So, what does this mean to you? It means to take a moment and ask people whether or not you are as good on the job as you claim to be. For example, are you doing a good job with dispute management on your own? Are you listening well to your team members in order to grow your business? Knowing your weakness is the first step in turning it into your next strength.
However, there is another type of person who is vulnerable to the Dunning-Kruger effect: the expert. Like how people overestimate their least-knowledgeable skillset, people who are highly knowledgeable tend to overestimate their ability to speak with others. In other words, some experts may not be aware that their audience is not properly interpreting their communication.
Furthermore, their audience may be hesitant to ask the expert for a clarification—especially among people who are in need to enhance their overestimated skillsets. This communication gap means experts must recognize whenever and wherever their colleagues do not fully interpret their advice. And they must make an effort to restate themselves in a clearer manner.
At Chargeback, we do not see ourselves as experts: we are simply great learners. We learn from our past in order to enhance our expertise in chargeback management. Our existence did not emerge from believing we have your back. It emerged from a lot of self-reflection and relying on each other’s strengths. This allowed us to obtain results that can show we have your back. Once we knew enough to realize we knew nothing at all, we made an effort to enhance our knowledge—and we are more than happy to help you come to this self-awareness.
So, in order for you to avoid the Dunning-Kruger effect, we recommend that you contact us today in order to enhance your skillsets with chargeback management. Also, we recommend the following advice in order to prevent future chargebacks, stalemates in team progress and other inquiries that can result from the Dunning-Kruger effect.
Make Dunning-Kruger People Become Aware of Mistakes
Earlier this year, we talked about the growing threat of online payment fraud, and how its growth can spark fear among cardholders and merchants. On the one hand, this fear can push cardholders to overestimate the need to file a dispute. On the other hand, it pushes merchants to overestimate what they are dealing with—and how they should deal with it.
Both parties express awareness of the rights and responsibilities related to chargebacks. But they do not know exactly the rules and procedures of said rights and responsibilities. Some examples for cardholders include misusing their chargeback rights from the issuing bank. For merchants, some examples include not knowing how to respond to a given reason code (For a full list of reason codes, click here). Let us explore how the Dunning-Kruger effect can affect a team’s overall progress with chargeback responses.
An Ambitious Member Files Rebuttals Improperly, Every Time
You are reviewing the performance rate of the dispute management team, and find some members are repeatedly performing below average with chargeback responses. They are nice members; prompt members. But they keep making the same mistakes in improperly filing the responses. How do you fill this knowledge gap? Dunning-Kruger individuals are not aware to ask for help for their overestimated skillsets. Educating these members about their mistakes is a good start. But consider this recommendation: make them aware of their shortcomings on their own.
In a 2013 white paper, A Better Return on Self-Awareness, David Zes and Dana Landis found that employees with high levels of self-awareness are associated with a company’s high level of performance. Those who are more self-aware of their limitations, the possible outcomes of risky investment and the team’s chemistry are more likely to produce larger returns for a company’s growth. So, if your team members are not instinctively aware of their recurring mistakes, we recommend that you conduct an internal quiz that assesses your team’s knowledge in properly filing chargeback responses.
Sometimes the best cure to prevent mistakes is to have members see a result that explains their current knowledge of a given skillset. The way that the quiz is administered will depend on how well you know members accept and apply new information. For example, some people are more receptive with written or digital quizzes while others are more receptive in a group, role-playing scenario.
Make Room For People to Ask For Help
Now, let us say you are interested in conducting the quiz. The members finally acknowledge their mistakes, and their performance shows when you see far less chargeback losses. It is a nice tool for self-awareness; but you also want other Dunning-Kruger individuals to not be hesitant to ask for help. This is another scenario where the expert can strengthen the knowledge of the poor performer. This requires a welcoming environment that allows people to willingly seek help when know what they have been doing was done improperly. For example, let us explore a scenario where asking for help is needed in one form or another: handling consumer disputes.
Customer Support Needs a Little More Support
The types of disputes never change, such as goods are damaged and transactions are not recognized. The way those disputes are expressed, however, vary in one form or another. Some consumers are well mannered to resolve the dispute while others are more aggressive, saying that they will contact the issuing bank if you do not agree with them. You were able to provide a guide that explains common scenarios that a representative may encounter. But that may not be enough to equip customer support for all expressions that may occur. For Dunning-Kruger individuals, the guide you provided may be interpreted as an all-around resource that explains everything about consumer disputes—and any fault or loss on their part is just part of the job.
You must give them some motivation, and reassurance, that it is all right to ask for help. Asking for help is another method for poor performer to be more self-aware of recurring mistakes. When they ask for help, you are giving them a chance to learn why they are not achieving the results they hope to achieve. It also gives them a chance to apply this new knowledge. Even something as simple as having open hours for representatives to speak with you can make a difference in their performance. Furthermore, this will also help them in terms of thinking realistically of what they can do, and what they should improve in order to resolve any dispute, no matter of how it is communicated.
Asking for help is not a sign of weakness; it is a sign that shows they want to improve, whenever and wherever you are handling a future chargeback.
Make Room for People to Contribute
Asking for help is great. Letting people work on their skillsets is even better. For example, let us explore how the Dunning-Kruger effect can affect the most common routine that every merchant performs: team meetings.
You Hold a Team Meeting About Everyone’s Performance
But you do so in a way that does not directly cast a spotlight on your weak-performing members. So, you decide to hold a meeting that everyone can contribute on improving dispute management. You really want the weak-performing members to contribute, but they do not often say a word in these meetings.
Before you question their willingness to contribute, ask yourself, ‘how am I inviting them to contribute in the meeting?’ Are you hosting these meetings as if you are giving a lecture to passive students? Are you forcing people to say something in order for the meeting to continue? Hopefully, you should know how your team just ‘clicks’ whenever they contribute in a meeting. You just need to dig deeper and find out what makes your weak-performing members ‘click’ in order from them to contribute as well.
In a 2012 study, The New Science of Building Great Teams, Alex Pentland found that successful teams have members who share these characteristics:
- Everyone on the team talks and listens in roughly equal measure, keeping contributions short and sweet
- Members face one another, and their conversations and gestures are energetic
- Members connect directly with one another—not just with the team leader
- Members carry on back-channel or side conversations within the team
- Members periodically break, go exploring outside the team, and bring information back
And above all, this most interesting finding is best described in Pentland’s words:
“Individual reasoning and talent contribute far less to team success than one might think. The best way to build a great team is not to select individuals for their smarts or accomplishments but to learn how they communicate and to shape and guide the team so that it follows successful communication patterns.”
In other words, find out what makes everyone in your team ‘click’, so that your future success in dispute management is more prominent than before. Having an equal-planning field in a meeting will require everyone, even the experts, to listen to everyone’s contributions. This will provide more of an opportunity for everyone to strength the team’s progress while also filling any knowledge gaps responsible for a Dunning-Kruger effect. This is an excellent transition for our next recommendation.
Even When It Seems Hard to Listen
It can be difficult to realize what you are doing is the wrong way to do it. An improperly filed chargeback response can be the deciding factor of whether you are liable to chargeback the cardholder’s dispute. With that in mind, we ask that you listen to what we have to offer: the Chargeback App. This application provides all the tools you need to provide compelling evidence and detect fraud whenever it emerges.
It consolidates your customers’ purchase history, payment processing and merchant account all in one platform. Its real-time features also empower you to refund customers, reroute shipments and cancel fulfillments to stop chargebacks from happening in the first place. Furthermore, our response templates are designed for each specific reason code, as this is not a ‘one-size-fits-all’ type of procedure. Our subscription is $99 a month for individuals who need assistance with chargeback responses. For teams who need additional features and functionality, click on our enterprise option below:
So, let us explore how the Dunning-Kruger effect can affect the performance of chargeback responses.
A Merchant Responds to the Issuing Bank
And you believe it is a good response. This is not your first time dealing with card-not-present (CNP) fraud. You know the reason code as if it is written on the back of your hand. You know all the evidence needed to support your rebuttal. And for some reason, this is not your first time losing a case like this.
Consider the following statement: it is not what you are saying in your rebuttal; it is how you are saying it. The best way for you to improve how you write your rebuttal is to have someone proofread it for you—or perhaps download our free response templates. Neither the proofreader nor us are not denying your knowledge in CNP fraud. We are simply helping you make your rebuttal clear and concise for the issuing bank. The last thing you want to do is assume that the issuing bank can clearly understand your argument even with the compelling evidence you submitted.
When you take time to improve your rebuttal skills, we are not suggesting that you should simplify your argument. There is a key difference between a simpler argument and simplifying an argument. A simpler argument is best recommended for the issuing bank to better understand your side of the dispute. Simplifying an argument can possibly delude the significance of your evidence and rebuttal. Simplifying it can also leave out important information that you thought was too complex to interpret.
A weak skillset can only get stronger from learning. That often means to continuously practice applying this new knowledge until it becomes second nature in your business. For example, as the customer support team listens and responds to customers’ dispute, devote time to learn about the frequencies of disputes and the common themes that arise when customers state the dispute. The longer you commit to know these themes, the more equipped you will be in developing a strategy to resolve this matter.
The Dunning-Kruger effect may occur in different industries, but its traits remain the same. Poor performers are unaware of correcting a mistake they do not know exist in the first place. Experts are knowledgeable to correct the mistake, but they presume that their audience easily translates what they are saying. This allows mistakes to only continue and further damage your business’ performance. Becoming more self-aware of yours and your team’s shortcoming is the first step in reducing the Dunning-Kruger effect.
We are glad to offer our guidance in dispute management and chargeback responses. And we know there is always room for improvement on our end. So please, do not hesitant to inform us how we can improve. We love to learn.