What is Representment?
Each time a cardholder initiates a chargeback, the merchant has two options– accept and pay, or fight. When a merchant chooses to fight chargebacks, they enter into a process called representment. Chargeback representment is the merchant’s chance to address the disputed charges by collecting and providing compelling evidence that proves the transaction was approved and completed properly.
Do I Have To Fight Chargebacks?
Chargebacks should no longer be just a cost of doing business. Merchants should do everything in their power to prevent and limit chargebacks. Even when you utilize various chargeback prevention tools, cases of illegitimate chargebacks will still occur. With cases of fraud and friendly fraud, it’s important to challenge these types of chargebacks. Once a customer receives free merchandise by abusing the chargeback process, they’re likely to continue targeting the merchant. Chargebacks are robbing revenues and affecting both the reputation and bottom lines of merchants everywhere. Challenging these chargebacks protects your brand and your reputation with the processor. Additionally, when you fight chargebacks, it prevents your store from being a target for future fraudsters.
Winning The Fight Against Fraud
As a merchant, you will be responsible for providing compelling evidence to challenge the disputed charge and demonstrate the transaction was valid. There are several things you can do as a merchant to make you more successful when you fight chargebacks:
- Understand What You’re Doing. The process of fighting chargebacks can be time-consuming and expensive. Merchants can’t fight to win if they don’t understand the game and the rules in the first place. It’s essential that merchants understand the chargeback regulations that apply to a representment before challenging a dispute.
- Maintain Proper Documentation. From the moment you start a business, you should keep detailed records and have an organized filing system for keeping track of important documents that may be needed as evidence. It’s difficult to fight a chargeback when you can’t locate the information and compelling evidence you need.
- Understand Reason Codes. Each credit card network has its own set of reason codes for filing a chargeback. This is important in determining the evidence you need to provide in order to successfully win the chargeback. Make sure you read and understand all of the reason codes before composing your rebuttal letter.
- Avoid Second Chargebacks (Pre-Arbitration Chargebacks). Make sure your case in comprehensive and air-tight to ensure that your representment is solid, and prevents the cardholder from filing another illegitimate claim. Cover all your bases and double check your work. You only have a limited amount of time, but don’t let that be an excuse to skip important steps and neglect important evidence. Do it right the first time.
- Don’t Hesitate. You have a very limited timeframe to fight chargebacks. Usually, a response must be made within seven days. Begin gathering evidence and drafting a rebuttal letter as soon as you have made the decision to challenge the disputed charge.
- Draft A Strong Rebuttal Letter. A chargeback rebuttal letter should be professional and direct, and must accompany your representment evidence. It is essentially a summary of proof that the transaction is valid.
Chargeback challenges don’t need to be time-consuming, annoying, or expensive.
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