How to Prepare for a Chargeback Representment

It’s important that all merchants know how to properly prepare for a chargeback representment case. Many merchants believe that fighting a chargeback dispute is a lost effort; however, this is simply not the case.

The key to preparing for a chargeback representment is in having access to the relevant facts, supporting evidence, details, and any information about the disputed purchase. The more accessible this information, the easier it is for a merchant to fight and win the chargeback dispute.

Not only is it important for the merchant to fight chargeback disputes, it’s also important for everyone involved in the chargeback process. The acquirer, issuer, and credit card company are all impacted by chargebacks, which increase the cost of doing business for everyone—not just the merchant.

Chargeback Representment Myths

Too many merchants give up on their chargeback dispute case before they start, all because of three popular chargeback representment myths. These myths, or business misunderstandings, should not stop merchants from defending their business and winning a chargeback case.

  • Merchants should defend themselves: This not always the best approach. Merchants who attempt to defend themselves typically lose the case. Partnering with an expert chargeback representment team saves time, money, resources, and often results in a higher success rate.
  • Chargebacks are just part of doing business: This need not be so. Chargebacks can be prevented and chargeback disputes can be won.
  • Chargeback representment process is too confusing: This is wrong. The process is confusing for merchants who don’t engage in best practices to have access to purchase details, supporting evidence, and expert assistance.

These chargeback representment myths grew out of misunderstanding, confusion, and a lack of knowledge. The more merchants know and understand about how and why chargebacks happen, the easier it is to dispel these myths and successfully win a dispute.

Using an end-to-end solution that provides front-end and back-end protection is the ultimate tool in chargeback protection, detection, and representment. The front-end protection is the first line of defense, alerting merchants as soon as a chargeback is filed, providing adequate time and information to prepare for the representment. The back-end protection works for the merchant to collect the evidence and details required to build the representment case, allowing the merchant to be proactive and recover lost profits due to unwarranted chargebacks.

How to Win a Chargeback Dispute

We want merchants to win their chargeback disputes. We want merchants to have the knowledge and information they need to properly prepare for a successful chargeback representment. The following steps detail the chargeback representment process and highlight the key steps to winning a dispute.

  1. The cardholder contacts their card-issuing bank to dispute a charge. This can be an honest complaint or an incident of true fraud (theft). Knowing customer buying habits and history can provide a merchant valuable chargeback protection.
  2. The issuing bank reviews the chargeback claim. Because they want to keep the cardholder happy (remember, this cardholder is also a customer of the issuing bank), the bank issues a provisional credit to the cardholder’s account. Now the bank has lost money.
  3. The merchant is alerted to the chargeback by the issuing bank. The merchant is charged for the chargeback refund and must also pay any fees associated with the chargeback. The issuing bank has a detailed fee structure associated with chargebacks, and the onus is on the merchant to understand these fees. These fees are typically tied to the merchant’s chargeback ratio and chargeback volume.
  4. A credit card company-specific chargeback reason code is assigned to the chargeback. The chargeback reason code contains all the details about the chargeback, including details as to why the chargeback was filed, time limits for responding to the chargeback, and evidence requirements. Each credit card company has its own list of reason codes, and it’s expected that the merchant has the adequate knowledge to understand the reason code and to act accordingly.
  5. The merchant must decide how to proceed. The options are to either dispute or accept the chargeback. It is in the merchant’s best interest to fight the chargeback—assuming the evidence shows that the chargeback is unwarranted. Many merchants will make the wrong decision here, simply because they don’t have access to the information that validates or invalidates the chargeback claim.
  6. To prepare the chargeback representment case, the merchant must adhere to the requirements outlined in the reason code. The merchant has a limited amount of time to prepare the evidence and documentation required to fight the chargeback. Along with a chargeback rebuttal letter, the merchant may have to provide sales receipts, proof of delivery, the return/refund policy, email communication with the customer, tracking numbers, and other evidence that supports the case. Typically, the merchant has only five to 10 days to compile this evidence.
  7. The merchant submits the evidence to their acquiring bank. The acquiring bank forwards this to the issuing bank. Neither the acquiring nor the issuing bank wants to spend time, money, and resources on the chargeback. That is one of the reasons why these vital merchant business partners increase fees for merchants who have an excessive chargeback volume and ratio.
  8. The issuing bank reviews the chargeback representment case and decides in favor of the merchant or the cardholder. If the merchant wins, the original charge is reposted to the cardholder’s credit card and the merchant is refunded their lost revenue. If the issuer decides in favor of the merchant, the cardholder may decide to file a pre-arbitration chargeback for the same claim. In this case, the chargeback dispute process begins again for the merchant.

Due to the time constraints and lack of communication throughout the process, chargeback representment can appear to be overwhelming. However, with access to the necessary details and expert advice, merchants can successfully fight and win these disputes.

How to Win Chargeback Disputes

Obstacles do sometimes pop up in the chargeback dispute success. But many of these impediments are simply myths that can be dispelled with adequate knowledge, external expertise, and preparation.

Taking advantage of an end-to-end solution that provides detailed chargeback prevention, detection, and representment gives merchants the opportunity to prepare for and win a chargeback dispute.

Get the experts at working for you to solve your chargeback problems, ensuring you can and will win your next chargeback dispute.


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