How Do You Calculate A Win Rate?

Alex ForbessBusinessLeave a Comment

A dispute win is important, and knowing the likelihood that your team will win (again) is very important. That is what makes a win rate an important metric. This post will explain how to calculate your win rate, and what constitutes as a ‘win’ in dispute management. Here is a basic definition to get this conservation started.

What is a Win Rate?

A win rate is a percentage that reveals the rate in which an internal team’s responses had won against disputes that initiated chargebacks. This percentage allows your internal team to rank their productivity and improve accordingly within their workflow.

There really is no fixed line that distinguishes a ‘good’ win rate from a ‘bad’ one. That will depend on the objectives that your team is trying to achieve. We will talk more about that later. But I first want to explain where a win can occur in the dispute process—and where that win can convert to a loss. The image below provides a good illustration.

Dispute Win, Explained

As I explain when a win applies to a win rate, I will have a scorecard accompany us throughout this explanation. We will start with (W: 0; L: 0).

Now let us say you first receive an inquiry about a transaction. The inquiry will provide some details about why the cardholder wants to know more about that transaction. Your team then gathers and provides all the data related to the transaction. The data give a descriptive account of the shipping order, product information and customer profile. This manages to convince the cardholder (and the issuer) that the transaction is valid.

The issuer then sees that the inquiry has been fulfilled and that a dispute should not be filed. Therefore, you have successfully prevented a dispute, and your scorecard remains at (W: 0; L: 0).

Why did I not win anything?

For the record, any inquiry fulfillment and dispute prevention can be seen as a win. That prevention lowers your dispute ratio, but it is not a ‘win’ that can be calculated in your team’s win rate. Remember that a win rate calculates wins and losses from disputes that initiated chargebacks. So dispute wins (and losses) that count toward your win rate originate in the chargeback phase. But a win may not last forever, as you will soon understand.

The Win-Loss Tango

If an issuer files a dispute after the inquiry phase (or if the issuer skips the inquiry phase), the dispute will initiate a chargeback. This means the dispute initially counts as a loss, and that will change your scorecard to (W: 0; L: 1). This dispute will remain a loss if your team decides not to submit a chargeback response. But that is not a good mark to have on their record.

So your team decides to submit a chargeback response. They wrote a well-written rebuttal and included the compelling evidence needed to challenge the dispute. The issuing dispute analyst reviews your response and is convinced that a chargeback is not valid. Therefore, your team won! Now your scorecard is (W: 1; L: 0).

The dispute process will end here in most cases. But there is a chance that either the cardholder or the issuer will challenge the chargeback reversal. So they decide to file for pre-arbitration. Your team responds accordingly, and they have won against pre-arbitration. Your scorecard remains at (W: 1; L: 0).

Let us say that the cardholder and issuer do not agree to the outcome in pre-arbitration. Now they drag in the card network to resolve the dispute in arbitration. And again, your team responded and they won. Your scorecard remains at (W: 1; L: 0) after your team has went through every phase in the dispute process.

Why did my team not earn two additional wins after being dragged into pre-arbitration and arbitration?

The scorecard that accompanied us does not keep score of how many times your team won throughout the dispute process. Instead, it merely keeps a binary track of the dispute involved in said process. Your team basically has two interrelated objectives once the dispute enters the chargeback phase:

  1. Change the initial loss (i.e., chargeback) into a win (i.e., chargeback reversal)
  2. Maintain that win if the dispute proceeds beyond the chargeback phase

The dispute can only earn a win or a loss if it is not rejected in the inquiry phase. There is another thing you should know (and use the image above as a reference). The dispute process ends if your team has lost in the chargeback phase, pre-arbitration phase or arbitration phase. That will permanently keep your scorecard at (W: 0; L: 1), and that will be a loss calculated in your win rate.

How Do I Calculate a Win Rate?

Your win rate is calculated by the sum of disputes your team has won (i.e., Dispute Wins), divided by the sum of disputes your team has won and lost (i.e., Dispute Wins + Dispute Losses). You will multiply that by 100, and that will show your win rate:

[Dispute Wins / (Dispute Wins + Dispute Losses)] * 100 = Win Rate

That’s it. Now let us put some context into this formula.

Example 1: Win Rate and Time Intervals

It is recommended to regularly update your win rate whenever new wins or losses occur. That will give you a (near) live status of your team’s productivity. But understanding how today’s win rate compares to last month’s win rate provides a useful metric.

For the sake of argument, you instruct a dispute analyst to calculate your win rate. Thirty days ago, it turns out his team had won 20 disputes and had lost 18. Then he looks at today’s numbers and sees the team had won 25 disputes and had lost 15. And these are the win rates he had calculated:

Table 1: Win Rate (30 Days Ago)

Disputes Won

Disputes Lost

Formula

Win Rate

20

18

[20 / (20 + 18)] * 100

52.6%

Table 2: Today’s Win Rate

Disputes Won

Disputes Lost

Formula

Win Rate

25

15

[25 / (25 + 15)] * 100

62.5%

It seems your team has improved by 9.9% since 30 days ago. Whatever they are doing, tell them to keep doing it.

Example 2: Win Rate and Win-Loss Changes

Three months has passed, and you are curious to know how your team is doing. You again instruct a dispute analyst to re-calculate your win rate. You tell him you want to know the team’s monthly win rate within the last 90 days.

The analyst retrieves these numbers from his spreadsheet, and this is what he has uncovered:

Table 3: Win Rate (90 Days Ago)

Disputes Won

Disputes Lost

Formula

Win Rate

25

15

[25 / (25 + 15)] * 100

62.5%

Table 4: Win Rate (60 Days Ago)

Disputes Won

Disputes Lost

Formula

Win Rate

30

25

[30 / (30 + 25)] * 100

54.5%

Table 5: Win Rate (30 Days Ago)

Disputes Won

Disputes Lost

Formula

Win Rate

60

50

[60 / (60 + 50)] * 100

54.5%

A colleague reviews the numbers and notices an error. Thirty days ago, it turns out there were five disputes that the team has lost in pre-arbitration. Somebody forgot to update the spreadsheet, so the dispute analyst re-calculates their win rate 30 days ago:

[REVISED] Table 5: Win Rate (30 Days Ago)

Disputes Won

Disputes Lost

Formula

Win Rate

55

55

[55 / (55 + 55)] * 100

50%

The numbers show the win rate declined by 8% decline from Table 3 to Table 4, and it declined more by 4.5% from Table 4 to [REVISED] Table 5. Now your team has an objective: find out why their win rate has declined in the last three months. Here some areas they can look into in order to find the problem—or problems.

I Know My Win Rate…Now What?

Find out what disputes your team is losing against

This is where good ol’ pivot tables come in handy. Out of all the disputes your team has lost, found out what kind of disputes are responsible for said losses. You can tell Excel (or Sheets) to count the frequency of reason codes within ‘X’ amount of months (or weeks). That allows your team to know what reason codes have been responsible for revenue loss.

You can also group these reason codes into specific dispute categories. That will help put some context into the most frequent disputes responsible for revenue loss. Some team members may not instinctively know Visa Reason Code 10.1, but they know what a fraud dispute entails.

You can use our Reason Codes page and Encyclopedia to know which reason code belongs to which dispute category. That will not only inform your team about the causes of these disputes, but it will also help them make adjustments that will improve their win rate.

Find out what is ‘missing’ in your team’s chargeback responses

And I am referring to both what is literally and figuratively missing in their responses. Sometimes dispute losses do not happen because of missing information, but because of incorrect information. This may have occurred when the analyst copied and pasted the data needed to disprove the dispute.

And by figuratively, I mean find out what is missing within the quality of their responses. For starters, did your team properly format their response in accordance to card network’s rules? What about the issuing bank’s guidelines? Your team may have found another problem if they answered ‘No’ to at least one of those questions.

Another thing that can diminish the quality (and your win rate) is the written in your response. The person reviewing the response will often be ‘time-crunched’ and may not have the patience to read a lengthy argument. The most effective argument is direct and provides guidance to where the reviewer can find the compelling evidence. One of our earlier posts gives advice on how your team can improve their chargeback responses. They will learn how to properly format a response and (most importantly) how to write their response the right way.

How Can I Improve My Win Rate?

Learning from your losses is a great starting point. But you may need to revise your dispute management workflow in order to prevent future losses. For instance, team members who need assistance with developing their response will benefit from a well-documented workflow.

Basically, their responses can be more effective if they have documentation that helps them overcome every challenge they may experience. It can be something simple like a PDF that provides all of the card networks’ reason codes. Or it can be something more robust, like response template that abide to guidelines set by the issuing banks.

Another way to improve your win rate is to streamline your dispute management workflow. This does not just involve condensing three steps into one, but also removing mundane tasks from the workflow altogether. One example is your team manually pulling and aggregating the data needed to disprove a dispute. The most repetitive (and prehistoric) tasks can wear down a team’s productivity. You’d be surprised how automation and API-integration can relieve the ‘wear-and-tear’ among team members.

In most cases, it is all about equipping your team with the right tools. And a well-documented and automated workflow can certainly improve their win rate and the quality of their chargeback responses.

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