Chargeback Rebuttal LettersThe Key Document You Need to Win Your Next Chargeback Dispute

Credit Card Chargeback Rebuttal Letters: The Complete Merchant’s Guide

A credit card chargeback rebuttal letter is key to successfully challenging a payment card chargeback. You can fight illegitimate chargebacks through the representment process, but you’ll need a strong rebuttal letter if you hope to get the chargeback reversed.

QUICK NOTE: Chargeback Rebuttal Letter Templates

Before we do a deep dive into rebuttal letters, it’s important to understand that using form letters or trying to craft letters directly from templates or samples could be a bad idea.

There is, of course, a general format to follow. There are certain elements that should be included in every chargeback rebuttal letter. Each representment case is unique, though, and should be treated as a distinct incident.

Download this sample Chargeback Rebuttal Letter

The credit card chargeback rebuttal letter is one of the first things a bank agent will look at after receiving your case. If a quick scan of your letter looks like something they have seen already—either from prior representments, or those of countless other merchants using the same template—they may not give it as much consideration as you’d like. Representment success demands that each rebuttal should include a unique letter created for that specific case.

What is a Chargeback Rebuttal Letter?

Chargeback Rebuttal Letter

[noun]tʃɑrdʒ ● bæk ● rɪ ● bʌ ● tl̩ ●

A chargeback rebuttal letter is a well-written synopsis of a chargeback case that explains why the claim is invalid. This situation-specific letter is an integral component of a dispute response package, which also includes compelling evidence to support your case and a completed Chargeback Adjustment Reversal Request form.

The chargeback process was created to protect consumers. More and more, however, cardholders are using loopholes in the system to abuse the chargeback process. Disputing a valid transaction in this way is called "friendly fraud.”

In some cases, friendly fraud can be an innocent mistake; the cardholder didn’t understand the process and assumed that a chargeback was the same thing as a refund. Other times, a customer may deliberately abuse the process to engage in cyber shoplifting. The good news is that, in either case, you can fight friendly fraud through the representment process.

You can think of representment like a court case. The issuing bank is the jury, and the rebuttal letter outlines the case you’re making to the jury, arguing why you’re innocent of the charge against you. It’s a written statement that’s meant to give context for the evidence you submit and explain how it undermines the cardholder’s claim.

Remember: your rebuttal letter is just one part of the representment process. It must come with other supplementary material to have a chargeback reversed, including a Chargeback Adjustment Reversal Request, as well as compelling evidence to support your claim. These components function as a unit; omitting any of them can derail your case.

The Chargeback Rebuttal Letter as Part of Your Chargeback Response

Crafting a rebuttal letter will be necessary under specific circumstances and at a specific point in the chargeback process. You should never try to contest a legitimate chargeback claim; however, we recommend fighting all illegitimate chargebacks, regardless of the cardholder’s motivation.

When a cardholder requests a chargeback, the issuer must review and approve the claim based on a set of allowable chargeback reasons. The chargeback is then forwarded to your acquiring bank, who debits your account and notifies you using a chargeback form called a Chargeback Debit Advice Letter. This letter is normally mailed on the same day your account is debited. You have two options at this point:

• Accept the chargeback (along with the accompanying fees and loss of merchandise).
• Challenge the chargeback through representment.

If you decide to challenge the chargeback, you’ll need to create a dispute response package, sometimes simply called a rebuttal. First, take a thorough look at the Chargeback Advice letter. Depending on the acquirer, some or all of the following information will be included:

• The chargeback reason code.
• The transaction amount and the chargeback amount.
• The action(s) already completed by the acquirer.
• The deadline for submitting representment documents.
• The adjustment date.
• The case number assigned to the chargeback.
• The cardholder number (or credit card number) used for the transaction.
• The 23 digit identification (or reference) number assigned by the card network.

That's a lot of information. How much of it is necessary to dispute the chargeback typically varies according to the card network, bank, and/or reason code. The Chargeback Adjustment Reversal Request we mentioned earlier is also included with the Chargeback Advice and may help interpret what needs to be addressed in each particular case.

How to Write a Chargeback Rebuttal Letter

Finally, let's take a look at how to craft the rebuttal letter itself.

Strong evidence will ultimately be what decides your case (more on that in a moment). However, a carefully constructed letter lets you underline and clarify how the facts support your challenge. This letter will probably be the first thing the bank agent looks at when reviewing the case, so strive for a good first impression. Here are some things to remember when crafting a rebuttal letter:

Your case is likely to get thrown out immediately without complete information. So, be sure to provide all the necessary transaction data. This would include:

Your Information

You’re dead in the water if the transaction and the challenge can’t be connected back to you. Provide the name of your business, your merchant identification number (MID), the reason code, and the case number of your challenge…basically, any information that lets the bank know whose case it is. It may help to add context, such as what type of merchant you are, what you sell, and the channels you use for selling.

The Cardholder’s Claim

Succinctly talk about the transaction, the cardholder who filed the dispute, and the reason code the chargeback was filed under. State the total amount of the transaction, and what service or merchandise was involved.

Your Case & Evidence

As clearly and concisely as possible, counter the cardholder’s claim and explain why the transaction was valid. Your letter should be a high-level list of the evidence in your dispute response package. Since the actual evidence is included, there’s no need for great detail, though.

Your Desired Outcome

What you asking for here—a reversal—should be obvious. It never hurts to formally state what you want to happen, though.

A credit card chargeback rebuttal letter must be succinct, clear, and compelling. We cannot stress this point enough.

Write as much as you need to be easily understood, but make every word relevant. You want the bank to understand your position and rule in your favor. Anything that does not advance those goals should be edited out.

Where Does Compelling Evidence Fit In?

Building a case for even one chargeback can be incredibly time-consuming. You’re saying the customer’s claim is invalid, and the bank will want proof of what you’re saying. You’ll need evidence to back up your challenge, and in most cases, the only one who can produce this evidence is you.

The specific evidence required for a given chargeback will depend on the reason code. In theory, the reason code will pinpoint why the cardholder is disputing the transaction. In reality, however, these codes often have nothing to do with the real reason a chargeback was filed. The true cause of a chargeback may be anything from an innocent misunderstanding to buyer's remorse or deliberate cardholder abuse.

Nevertheless, the reason code represents what the bank considers the reason for the chargeback. That means that for the purposes of representing the case, your evidence must counter whatever reason code accompanied the Chargeback Advice letter.

Like other parts of the chargeback progress, the rules for evidence differ between card networks. Examples of what might be considered compelling evidence include:

• Sales receipt or order form
• Proof of delivery
• Evidence the customer is satisfied with the purchase
• Evidence the quality of the items or services was acceptable
• Evidence the purchase was made by an authorized member of the cardholder's household

While this list represents several commonly requested items, it is hardly exhaustive. You’ll need to be very familiar with the chargeback regulations of all the major card networks to know what you’ll need to include. Here’s a more in-depth article offering best practices for compiling evidence.

Want more information on how to best create an acceptable and effective rebuttal letter? Download the Chargeback Rebuttal Letter Guide for templates, advice, and a winning rebuttal checklist.

Warning: Get the Full Picture

You can build your own dispute response, but there are multiple facets to consider. For example, cardholders sometimes have as long as 120 days to dispute a transaction; you won’t have that luxury. In most cases, a chargeback rebuttal must be submitted in less than a week. That’s not much time to craft a compelling response.

Statistically speaking, chargeback management without professional oversight is usually ineffective. Do-it-yourself strategies can only snag the "low-hanging fruit"—that is, chargebacks issued in error or which come from obvious mistakes.

Some eCommerce software programs claim to be able to automatically collect the necessary information. Even with such a system, however, you need to ensure the correct data is being collected.

The chargeback representment process itself is complicated, hard to understand, and subject to ongoing updates and revisions. The particulars for required evidence vary by card network and can change with no notice, so you must keep up with all changes and updates to card network rulesets. Plus, individual parties—banks, card networks, processors, etc.—all have different guidelines, which makes successfully creating a chargeback dispute response even more complex.

Sending wrong, incomplete, or misleading information with your chargeback rebuttal letter can do more harm than good. Even outsourcing the task can be risky if you partner with the wrong service provider. Some firms will address only the most obvious claims, while others simply send automated details that can damage your reputation with the issuer.

In short: what you don’t know can hurt you.

The right professional assistance ensures a higher net win rate without damaging your reputation or increasing risk. Chargebacks911® offers award-winning assistance with representment, rebuttal letter writing, and other post-transactional fraud needs. To find out more, contact us today.