AutoNation: Taking Charge of Chargebacks and Upgrading Downgrades

The Client

AutoNation, America’s largest automotive retailer, is a Fortune 500 company employing more than 26,000 associates at over 350 franchised locations from coast to coast. The company has sold over 11 million vehicles – the first automotive retailer to reach this milestone.

Optimization Benefits Realized


annual savings from decreased chargebacks


savings in intechange fees from reduced downgrades


dashboards to view details from all credit card payment data

Payment processing expenses, an area notorious for its tendency to strain financial resources. As an organization expands its reach and operations, the magnitude of these costs escalate.

The intricacy of the issue lay not just in the absolute figures but in the  difficulty of controlling and mitigating these expenses. The traditional approaches to cost management often fall short in the realm of payment processing, where various factors, including transaction fees, third-party charges, and evolving industry standards, contribute to a challenging environment.

The Process

Optimized Payments immediately went to work on collecting and analyzing the tremendous amount of card processing data AutoNation received every month from American Express, PayPal, two merchant acquirers, and two private-label card providers. To note, some of these credit card partners provided merchant statements that were over 5,000 pages.

The Background

Processing millions of credit card transactions annually, we knew we were spending too much on credit card fees, notes

Greg Moore, Director of Treasury Operations, AutoNation


Identifying The Culprits

It didn’t take long for Optimized Payments in-depth analysis and innovative dashboard to identify two major areas for improvement in AutoNation’s payment processing expenses. Chargebacks and downgrades were both eating away at profits. Optimized Payments collection and analysis of AutoNation’s data was developed into a continually updating dashboard that provides AutoNation with a powerful tool for in-depth information, actionable insights, and decision making. With this, Optimized Payments transformed mounds of disparate data into an organized and consolidated knowledge tool that AutoNation still uses today.


Responsibility for chargebacks was decentralized, with each store handling their own chargebacks. However, this structure resulted in stores typically only responding to about one out of every three chargebacks they received (an estimated 30%). While chargebacks at each store weren’t significant, Optimized Payments analysis showed that, in aggregate, the total cost amounted to much more than AutoNation realized.


Similarly, downgrades were also problematic. They represented a troubling 20% of sales. The reason? Optimized Payments determined that AutoNation wasn’t supplying level 2 and 3 data in the settlement file for commercial cards. Thus, the card networks were penalizing each transaction with higher interchange fees.

This was a real eye opener for us. We didn’t think we had a chargeback problem, but it was clear we did. This was the first sign that we had made the right choice in choosing Optimized Payments, as having a team that’s able to give you info about where your weaknesses are is extremely valuable.

Greg Moore, Director of Treasury Operations, AutoNation


The Solution

Implement Optimized Payments Analytics


Transform mounds of disparate data into an organized and consolidated tool that allows users to manipulate dashboards to filter, sort and drill down to minute details of individual stores.

Centralize Chargeback Processes


Streamline chargeback processes to a small centralized team that handles chargebacks across all stores.

Decrease Downgrades


Helped AutoNation implement the ability to supply needed level 2 and 3 data resulting in decreasing downgrades from 20% to 6% of sales.

The Feedback

I have no regrets whatsoever over the last seven years we’ve worked with Optimized Payments. They provide in-depth knowledge about one of our largest cost items and enable me to focus on things other than number crunching or quantifying anything related to payment processing. That’s a huge relief. The whole team is simply fantastic and so customer focused.

Greg Moore, Director of Treasury Operations, AutoNation

Simplify the Complexity of Payments Data with Visual Tools.

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