Why might merchants generally incur additional fees during disputes?

Merchants often incur additional fees during disputes primarily due to the necessity to meet customer satisfaction thresholds. When a dispute arises, it usually points to issues such as service dissatisfaction or product quality concerns. Merchants are incentivized to resolve these disputes amicably to maintain consumer trust and loyalty, which could involve offering refunds, replacements, or additional benefits to the customer.

By focusing on customer satisfaction, merchants aim to uphold their reputation and possibly avoid further escalations such as chargebacks, which can carry their own associated fees and complications. Effectively managing these disputes often requires resources and financial investments that contribute to the overall cost.

In contrast, while increased shipping costs or costs related to customer outreach may be factors involved in certain situations, they do not universally apply to all disputes merchants face. Similarly, the necessity to update legal compliance may not directly impact the costs incurred specifically during a dispute process but could be a separate consideration in their broader operational strategy.