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Compelling Evidence

What Compelling Evidence Can Be Used to Challenge Chargebacks?

“Compelling evidence” is one of the key components of a winning chargeback dispute.

Let’s assume you dispute a chargeback through the representment process. You’re allowed to push back against chargebacks you feel are unjustified, but the process is very specific. The bank requires something to demonstrate that the chargeback is invalid, and the original transaction was legitimate. You must also prove you acted according to best procedures and policies.

Along with a rebuttal letter, you need compelling evidence in the form of either written or electronic documentation. This must all be submitted to the bank within a restricted timeframe. If you present a compelling case while strictly adhering to card network mandates, though, there’s a chance the bank will reverse the chargeback.

That begs the question: what evidence do you need to help make the strongest case possible?

What is Compelling Evidence?

In most chargeback cases, the bank will initially take the side of the customer. It sounds unfair, but you’re essentially “guilty until proven innocent.”

It would be difficult (if not impossible) to prove a claim beyond any shadow of a doubt. Fortunately, that’s not what the regulations call for; banks only need strong evidence to create a reasonable doubt concerning the consumer’s case. The stronger the evidence, the better the odds that the chargeback will be reversed.

Many different types of documentation are considered compelling evidence in a chargeback dispute. For example:

Any of these documents—and many others—can help prove the legitimacy of the disputed transaction and contradict false claims made by the cardholder. The type of document is less important than its function: whatever evidence you share, it must clearly exhibit the validity of the transaction in question.

Not all evidence works in every chargeback case. When you receive a new chargeback, the first step should be to check the reason code.

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The Importance of the Reason Code

Reason codes are an abbreviated way of offering a basic explanation for the chargeback. Each code refers to one of the specific rationales that card networks consider legitimate reasons for a customer dispute.

You must tailor the representment case—including the compelling evidence—to the reason code under which the bank filed it. This can be problematic, in that reason codes are notoriously ineffective at accurately reflecting the consumer’s real motivation for disputing a transaction.

Complicating matters further, each card network (Visa, Mastercard, etc.) has its own reason code system. Banks also have di­fferent criteria for assigning a reason code from the limited options available. The end result is that, for most merchants, over half of their chargebacks are mislabeled.

The reason code technology is outdated and easily exploited. Nevertheless, you need to argue the dispute based on the designated reason code, even if that code is inaccurate, misleading, or completely false.

Find Which Evidence is Considered Compelling

Each network and reason code has its own standards and mandates for what constitutes compelling evidence. For the most part, these expectations are rather generic; any documents that back up your claim will help. The specifics, however, can vary by case.

Consider a chargeback with Visa Reason Code 13.1: Merchandise/Services Not Received. To reverse this chargeback, you must provide documents that demonstrate the delivery was made to the address you received as an AVS match.

A signed delivery confirmation from the shipper works for physical goods. In the case of digital items or services, however, a different type of evidence would be required, such as a server log that showed the customer had logged in and accessed the service.

Once you learn the reason code for the dispute, you must consult the individual card networks’ official guides to determine appropriate documentation.

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Challenges of Creating Effective Chargeback Disputes

Challenging chargebacks requires a considerable up-front investment of time, energy, and other resources…with no guarantee of success. Several factors contribute to this:

Inconsistent Policies and Practices

Inconsistent Policies and Practices

Card networks update their regulations—which are already lengthy and complex—on a frequent, yet irregular basis. It isn’t uncommon for card networks to make major changes to their regulations at least twice a year, with smaller updates coming constantly. It’s challenging to stay current, but absolutely necessary. What constitutes compelling evidence may change overnight; what was acceptable one day may be ineffective the next.

Limited Resources

Limited Resources

The representment process is complex and time-consuming, even under ideal conditions. Consulting network policies and locating compelling evidence can tie up a significant amount of resources. With even a few chargebacks a month, you’re forced to invest time and energy in solving past problems, hampering your ability to focus on revenue-generating areas and future growth.

Low Chance of Success

Low Chance of Success

Historically, merchants who fight their own chargebacks receive a dismally-low return on investment. And even if you do reverse a case, there is still the risk of a pre-arbitration (formerly called a “second chargeback”). Card networks allow issuers to challenge a representment through a pre-arbitration; this means you could be forced to execute the representment process, in its entirety, a second time. This involves additional, highly-punitive fees, with an even lower chance of success.

Thinking Ahead to Make the Process More Effective

Because of its importance—and because of the stringent time constraints of disputes—merchants must be proactive in the gathering of compelling evidence. This means developing a coordinated system to collect and archive evidence at the point of the transaction, making it available and easily accessed when needed.

Here are some helpful suggestions to keep in mind concerning capturing compelling evidence:

  • If an IP address has been used for previous (undisputed) purchases, track those transactions to help establish a cardholder’s “intent to purchase.” This can also point to the disputer’s familiarity with your site, your services, and your policies.
  • Put the customer at the point of the sale. In addition to collecting the cardholder’s IP address, always verify the billing address and security code.
  • Use delivery confirmation whenever possible for physical merchandise. For digital goods and services, reference server logs that show the cardholder logged in to download products or had some other interaction with the disputed item.
  • Post all shipping, return, and other applicable policies on your site, in clear view. Better yet, have a button or check-box where customers must agree to terms before submitting an order.
  • Document and archive any time a customer contacts your customer service department.

Don’t Be Afraid to Ask for Help

You want the best chargeback management results possible. This means the highest win rates, fewer pre-arbitrations, an improved reputation among industry members, and the best revenue recover. To achieve this, we recommend considering outside help.

Chargebacks911® offers a fully-outsourced solution for comprehensive chargeback management, featuring end-to-end accountability, extensive reporting, and customized risk mitigation plans. Plus, all our services are backed by the industry’s only performance-based ROI guarantee.

Our proprietary systems capture data at the point of each transaction, then automatically use that information in the event of an illegitimate chargeback. You see a higher win rate while investing less time and fewer resources.

If you’re struggling with compelling evidence—or any other aspect of the chargeback process—contact us today and see what Chargebacks911 can do for your business.

 

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