Can I Win a Chargeback Reversal?

Don’t Stand by and Do Nothing—Let Us Show You How to Fight Chargebacks

Chargebacks are a massive problem in the ecommerce environment.

Card-not-present merchants lose upwards of €40 billion annually in profits, merchandise and fees as a result of chargebacks. These forced refunds also harm merchants’ reputations and can even threaten their business’s survival.

Successfully fighting chargebacks will retain revenue and promote long-term sustainability. That’s why fighting and winning a chargeback reversal is key.

What is a Chargeback Reversal?

Research suggests that as much as 86% of all chargebacks are actually a form of card-not-present fraud known as “friendly fraud.” Fortunately, there is a structure in place by which merchants can fight chargebacks, called representment.

The process of a chargeback follows this basic structure:

  1. Presentment: The initial transaction by which the cardholder makes a purchase
  2. Chargeback: The cardholder, claiming that the transaction was fraudulent, demands that the charge be reversed
  3. Representment: The merchant gathers evidence supporting the belief that the transaction was authorised and carried out according to the agreed-upon terms, then re-presents the transaction with the acquirer’s assistance
  4. Arbitration: The cardholder provides additional evidence to support his or her demand for a chargeback. The card network then reviews the two parties’ cases and makes a final decision

Chargebacks resulting from friendly fraud can devastate a card-not-present merchant’s business. The average chargeback will cost merchants a total of €3.34 for every dollar of the original transaction, and runaway chargebacks can lead to an acquirer cancelling and blacklisting the merchant’s account.

That’s what makes representment such a vital tool at the disposal of ecommerce merchants. Representment allows merchants to challenge chargebacks which they believe are instances of fraud. Once a cardholder files a chargeback, representment is the only possible way to see the transaction upheld.

Identifying Card-Not-Present Fraud

Friendly fraud is most often hiding behind reason codes which suggest merchant error or criminal fraud. For example, a cardholder might claim merchant error and request an “item not as described” chargeback, even though the merchandise is precisely as it was described.

So, how can merchants distinguish friendly fraud from legitimate chargebacks? How can merchants know when to fight back against illegitimate card-not-present fraud? First, merchants should look for the telltale signs of friendly fraud:

  • Did the merchandise arrive on-time at the correct address?
  • Does the billing address match the shipping address?
  • Did the cardholder place just one order at a time, rather than multiple orders using the same billing address?

If the answer to all three is “yes,” then there is a decent chance that a chargeback is an example of friendly fraud.

Seeking a Chargeback Reversal

There are two primary elements to a chargeback reversal—the evidence and the rebuttal letter. For the former, merchants will need to find tangible, compelling documentation which contradicts the customer’s claims regarding the transaction.

For example, if the customer claims that the merchandise never arrived, proof of delivery can be very useful.

The merchant will have seven days from the chargeback’s initial filing to submit their evidence, along with a rebuttal letter explaining their case to the acquirer.

When to Seek Help

Of course, preparing a representment case alone can be very challenging. Most merchants do not have the time, the resources or the wealth of knowledge needed to navigate the maze of regulations imposed by issuers and card networks regarding chargeback reversal. Seven days is a very small window in which to conduct all of the necessary legwork.

As a result, merchants often find it easier, faster and ultimately more productive to seek outside help with chargeback representment.

Our services offer merchants the opportunity to not only beat chargebacks through effective, tactical representment, but actually prevent chargebacks before they happen. Contact us today to get started and see how much you could be saving with a free chargeback analysis.