When a merchant feels that a chargeback was filed without a valid reason, they can fight that issuance through a process called “representment.” But, as Chargebacks911 COO and Co-Founder Monica Eaton explains in a new feature for Versapay, how merchants analyze their success at representment, though, could substantially impact their risk management strategy.
Versapay is a Canadian financial technology company that specializes in accounts receivable software. It was listed on the TSX Venture Exchange under the symbol VPY between January 2010 and February 2020 when it was acquired by private equity firm Great Hill Partners
Monica explains that the representment process is a complicated, time-consuming process and there’s no guarantee of success. For many businesses, optimizing representment is a question of trial and error. The key to ensuring merchants make the best use of their time and resources—and recover as much revenue as possible—is a figure known as chargeback win rate.
“This metric is an important key performance indicator (KPI) for chargeback management,” Monica writes. “According to the 2022 Chargeback Field Report, the average merchant reported a chargeback win rate of 45%. This suggests merchants who engage in representment win nearly half of cases.”
Monica is aware of the complexity of this issue. She notes that most survey respondents in the above-mentioned report failed to distinguish between their win rate and their net recovery rate.
“This disparity between the average chargeback win rate and net recovery rate suggests merchants are overlooking the latter KPI and relying solely on the former to gauge the effectiveness of their chargeback management. This mistake could literally translate to millions of dollars in unnecessary losses every year, depending on the scale of the business.”