How to Win a Chargeback Dispute: The Inside Guide for What Merchants Need to Know

So, you’ve received notice of an incoming chargeback...but you’re confident the claim isn’t quite right.

You remember the customer. You have copies of conversations and chat logs, or maybe you have a confirmation proving that the order was delivered on time and intact. Is that enough to win the chargeback dispute and recover your funds?

In this article, we'll explore how to win a chargeback as a merchant, and provide some tips to improve your odds of winning a chargeback reversal.

Why Do Chargebacks Happen?

Let’s start at the beginning.

Banks and card networks created the chargeback process to resolve credit card payment disputes. When a cardholder does not authorize a charge, or is unhappy with a product or service, they are entitled to challenge the transaction. If the cardholder’s issuing bank feels the consumer’s claim is valid, they will initiate a chargeback to reverse the payment.

This is an important consumer protection mechanism. Chargebacks play a crucial role in protecting consumers against fraud and abuse. However, the growth of eCommerce changed the game regarding chargebacks.

Learn more about chargebacks

eCommerce has made shopping faster and more convenient than ever. A side-effect here is that cardholders started to file more and more credit card disputes.

The anonymity of online transactions makes it difficult for merchants to fully validate buyers’ identities. To make matters worse, though, it’s also become a lot harder for banks to validate cardholders’ claims before approving chargebacks.

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“Friendly fraud” covers any situation in which a consumer disputes a legitimate charge. This can happen innocently or maliciously. For example, if the cardholder:

Doesn’t recognize or simply forgot about the purchase.
Misunderstood the delivery date and believed they’d been scammed.
Asked the bank about a transaction, unknowingly initiating a dispute.
Confuses a chargeback with a refund
Believes filing a chargeback will be easier or more convenient.

A cardholder might inadvertently file a false chargeback claim for any number of reasons. However, the negative impact on you, the merchant, is essentially the same either way.

Learn more about friendly fraud

Ignoring a chargeback is always a bad idea. This is particularly true when you consider that about 60% of cardholder claims are cases of accidental or intentional friendly fraud. That’s why you should fight against any chargeback claim that you can prove is an invalid.

So, with that in mind, let's get down to the core question: how to win a chargeback dispute.

What's the Process for How to Win a Chargeback?

Want to challenge the bank’s decision? There is only one way to go about it: chargeback representment.

Chargebacks are won or lost through a process called representment. During this process, you literally ‘re-present’ the transaction to the bank for a second review.

The representment process works basically as follows:

Step 01 | Identify the Reason Code

The first thing you should learn is to identify the chargeback reason code, which is a kind of shorthand that indicates why the transaction is being disputed. While the reason code may not reflect the true reason for the chargeback, you must respond to the chargeback based on the code provided.

Learn more about reason codes

Step 02 | Respect the Time Limits

You have a small window in which to respond to incoming chargebacks. You will automatically forfeit the case if you submit your representment package past the deadline, so you must keep within the allowed timeframe. The amount of time granted will vary by card scheme and reason code. Both will be explained in your notification letter.

Learn more about chargeback time limits

Step 03 | Assemble Compelling Evidence

Your entire representment case hinges on the evidence you provide. If the bank finds your evidence compelling, you may win your chargeback. But, what banks find “compelling” also varies according to the institution, card network, and reason code.

Learn more about compelling evidence

Step 04 | Write a Rebuttal Letter

Evidence is important, but it needs context. To make a compelling case, you have to share your side of the story and make a winning argument. Your chargeback rebuttal letter should include a concise summary of your evidence, clearly explaining how the cardholder’s dispute is invalid. It should present the facts professionally and dispassionately, avoiding emotions and overblown explanations.

Learn more about chargeback rebuttal letters

Step 05 | Compile & Submit Your Representment

Once you have your evidence and rebuttal letter, it’s time to submit your representment to your acquiring bank. The acquirer will review the case and ensure that all necessary documents are included. They will then send it to the cardholder’s issuing bank for a final decision.

Learn more about chargeback documentation

So, now you know how the representment process works. Knowing the steps doesn’t really mean you know how to win a chargeback as a merchant, though.

Compiling the right evidence and presenting it in the right way takes a lot of skill and expertise. Like we mentioned above, the materials you need will depend on your product vertical, the customer’s claim, and a host of other factors.

Confused about chargebacks? You’re not alone. The good news is that help is just a click away.

Compelling Evidence for Different Merchant Verticals

When factoring your evidence against a chargeback claim, you have to consider the type of business you have. This can have a profound impact on the outcome of the representment case. It can also impact your calculations as to how to win a chargeback.

While the bank will usually include a letter detailing the evidence they require based on your reason code, they may also require additional information based on your merchant status. To illustrate, let’s look at three different merchant types, and see how to win a chargeback in one of these scenarios.

Chargeback Evidence for Physical Goods Retailers

eCommerce merchants who sell and ship tangible products online must provide evidence that the individual who made the purchase is the cardholder, and that the individual received what they paid for. The number one weapon you will have is proof of delivery, signed by the cardholder.

Failing that, there are other forms of evidence the bank will accept, including:

Verified cardholder data; AVS & CVV matches
Copies of any chats, emails, or other communication with the buyer
Copies of any photos of the cardholder using the product online
Signed proof of delivery

Chargeback Evidence for Digital Goods & Subscriptions

Digital goods and services, like subscriptions, work differently from eCommerce or traditional retail stores. Here, the challenge is to prove that the cardholder received the non-tangible product they paid for.

If you sell digital services or subscriptions, your best bet is to match the customer’s IP address to the information associated with the credit card used to conduct the transaction. Thankfully, you can also use that same IP address to pinpoint when—and where—that customer logged into and downloaded your products. Other evidence you can include:

Verified cardholder data; AVS & CVV matches (for initial purchase)
Copies of any chats, emails, or other communication with the buyer
Verified usage; IP address confirmation
Terms of service signed by the cardholder

Chargeback Evidence for Entertainment, Hospitality, & Travel

Hotels, travel services, and entertainment venues experience a lot of chargebacks. This is because they deal with reservations; customers often make reservations, then decide to cancel at the last minute or forget entirely that they ever initiated the transaction.

To combat travel and hospitality chargebacks, you must prove that the cardholder themself made the reservation and agreed to be charged for any deposits and fees. You can prove this with evidence like:

Voice authorization (if reservations were made over the phone)
Copies of tickets and check-in confirmations
Verified cardholder data; AVS & CVV matches
Copies of any chats, emails, or other communication with the buyer
A copy of the customer’s photo ID, if one was provided
The name of the family member who initiated the transaction
Terms of service signed by the cardholder

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Improve Your Odds of Winning

Winning a chargeback as a merchant is not impossible...but it won’t be easy. If you want to increase your chances and keep your business safe, you should consider the following practices:

Understand the system

Know and understand the most current applicable chargeback representment regulations before a dispute happens.

Get organized

Devise a system for collecting and organizing essential documents so they can be located quickly.

Mind the deadline

To meet the tight deadlines for representment, you must gather evidence and respond as quickly as possible.

Don’t rely on machines

Automated systems can streamline the representment process, but their inflexibility will mean incomplete or inaccurate responses. Human oversight is always necessary.

Talk to banks

Consult with multiple issuing banks to determine the best way to respond. Pattern your cases based on what you learn.

Fight back

Responding to every illegitimate dispute is the best way to maximize revenue retention and protect your reputation.

Ask for Help

This will be our last, crucial tip.

It isn’t always easy to obtain—let alone analyze—your chargeback data. It costs time and money to track patterns, calculate risk, and compile key performance indicators (KPIs). You have to learn what is or isn’t working and how much ROI you could receive. These are crucial steps toward learning how to win a chargeback as a seller.

Here’s the good news: you don’t have to do it alone.

Chargebacks911® has the innovative strategies and technologies you need to relieve the burden of representment. Our attention before and after every case ensures a better chargeback win rate than any other method, all backed by the only performance-based ROI guarantee in the industry.

Want to know how successful your chargeback representment efforts could be? Contact us today for a free, no-obligation ROI analysis.