When a credit card company analyzed its disputes area, it found that almost 30 percent of disputes involved transactions less than $25 in size. When an item goes into dispute, a long and complicated process, dictated by law, must be followed that involves collecting and sending out information. The card company found that the average cost of carrying out an investigation was more than $25. Every dispute under $25 that it resolved cost the company money.
Suggestions about streamlining the process all proved impractical, as the dispute process is subject to federal regulation. The company was unclear about how it could stop losing money on these small-sized claims without violating any regulations.
Size really mattered here. In this case, transaction sizes were too small and unprofitable to provide the level of service that was being given, but the company was constrained by both federal regulation and its desire to have a fair process for resolving claims disputes.