Representment Rights Are More Extensive Than You Think

Representment Rights

Your Right to Dispute Chargebacks: It’s About Much More than Revenue Recovery

When confronted with a chargeback, merchants have two options: they can accept it or dispute it.

Accepting a chargeback means forfeiting revenue and sustaining reputational damage. Disputing a chargeback means recovering revenue that never should have been lost and ensuring the business’s longevity.

Though merchants have the right to dispute chargebacks, few actually do.


Why do merchants walk away from the chance to improve their bottom line and ensure sustainable growth?

Why Merchants Don’t Fight Back

Representment is a right granted to merchants through both card networks’ chargeback regulations. However, few merchants take advantage of this right.

Chargeback management consumes 20% of the average merchant’s operational budget.
Three in four merchants think their ineffective chargeback management negatively impacts the bottom line.
44% of merchants think it costs too much to control fraud and the resulting chargebacks.


Only 28% of merchants take advantage of their representment rights and dispute all possible cases.
When merchants do fight back, they only win 23% of their representment cases.


The reason representment rights are often forfeited is because merchants are unable to differentiate between the disputable and indisputable chargebacks.

Disputable SwitchDisputable vs. Indisputable Chargebacks

Chargebacks911® has made a revolutionary discovery: all chargebacks are caused by one of three things.

  1. Merchant error
  2. Criminal fraud
  3. Friendly fraud

By forgoing vague reason codes and categorizing chargebacks in this simple way, merchants are then able to distinguish between disputable and indisputable chargebacks.

Obviously, it isn’t in the merchant’s best interests to dispute chargebacks that stem from merchant error or criminal fraud. Merchants can’t expect to recover lost revenue if their own shortcomings or oversights led to the chargeback. Likewise, consumers shouldn’t be held accountable for transactions they didn’t authorize.

That leaves friendly fraud as the only chargeback source that allows merchants to execute their representment rights.

Insufficient Data Leads to Inefficient Solutions

When left to their own devises, merchants are unable to distinguish between the three chargeback triggers.

As a result…

  • Merchants base their management strategies on insufficient data.
  • They implement ineffective solutions that target the wrong problem.
  • Their efforts only address the symptoms, not the actual chargeback source.

For example, merchants lost out on $118 billion in revenue opportunities last year. They lost these funds to false declines—merchants terminated perfectly good transactions made by honest customers because merchants were fearful of criminal fraud. In the end, criminal fraud totaled $9 billion.

That means, merchants needlessly lost $118 billion while trying to solve a $9 billion problem.

This one example is characteristic of chargeback management in general. Merchants inaccurately assume criminal fraud is to blame, thereby making it impossible to dispute the chargeback they sustain.

Two compelling factors contribute to this inaccurate assumption.

  • The vast majority of chargebacks are filed with reason codes that indicate an unauthorized transaction.
  • Chargebacks were originally designed to protect consumers from fraud.

In reality, criminal fraud contributes to less than 10% of all chargebacks. For most merchants, it’s actually less than 1%. Friendly fraud, on the other hand, causes between 60% and 80% of all chargebacks.

Minimizing the Need for Representment

Before merchants enforce an aggressive representment strategy, they must first minimize their liability. Avoiding all preventable chargebacks leaves only those that can be disputed.

Fortunately, with the right tools, merchants are able to virtually eliminate their risk of the indisputable chargeback triggers—criminal fraud and merchant error. Once these threats have been minimized, all merchants have left is the disputable friendly fraud.

Eliminating Criminal Fraud

Numerous issuing banks have joined alert networks. These banks have agreed to “alert” merchants when transactions are disputed based on unauthorized behavior. These alerts give merchants the opportunity to refund the cardholder before a chargeback is filed.

Chargeback alerts help reduce the risk of chargebacks and save merchants the accompanying chargeback fee. These are one valuable tool to help manage risk.

Chargebacks911® offers the broadest alerts coverage on the market today. By combining our proprietary network with those of third-party providers, we offer more protection than anyone else.

Fraud filters are also a necessary criminal fraud prevention tool. However, automation without expert analysis increases the odds of false positives—as many as 72% of transactions are declined unnecessarily.

Chargebacks911® helps merchants perfect their fraud rules, decrease declines, avoid fraud, and retain more revenue.

Eliminating Merchant Error

Between 20% and 40% of all chargebacks are caused by merchant error. Whether mistakes are made during the original account setup or during individual transaction processing, these issues—and the resulting chargebacks—are entirely preventable.

Chargebacks911’s Merchant Compliance Review is a 106-point inspection of a business’s policies and procedures. We are able to identify shortcomings that are likely resulting in chargebacks. Following our expert analysis, a case manager works with the merchant to implement the necessary changes and reduce chargeback risks.

Contact us today if you’d like to learn more about our revolutionary Merchant Compliance Review.

Why It’s Not as Simple As it Sounds

It all sounds so simple. Prevent criminal fraud. Prevent merchant error. Dispute friendly fraud. However, one very important question remains.

How can a merchant identify friendly fraud?

How is it possible that the majority of chargebacks are filed with reason codes that implicate criminal fraud, but Chargebacks911® claims as many as 80% of chargebacks are really friendly fraud?

Reason codes were devised before the invention of the internet. Modern technology has made the original chargeback process archaic and rendered reason codes an inefficient measurement tool. Now, friendly fraud can be disguised behind virtually any reason code.

If reason codes don’t tell the real reason for the chargeback, what’s a merchant to do?!

Introducing Intelligent Source Detection™

Merchants needed a definitive way to identify the true chargeback triggers, and Chargebacks911® delivered.ISD

Intelligent Source Detection™ is a revolutionary product, one of a kind. ISD is the only product on the market today that is capable of identifying the reason behind the reason code. Our patented combination of technology and human forensics enables us to identify the true chargeback sources and create effective prevention and representment strategies.

Without Intelligent Source Detection™, merchants are unable to distinguish between criminal fraud, merchant error, and friendly fraud. This means they are unable to take full advantage of their representment rights—ultimately jeopardizing their bottom line, payment processing abilities, and longevity of the business.

Merchant’s Right…and Responsibility

Merchants absolutely must take advantage of their right to dispute chargebacks, as the representment process is the only way to recover their hard-earned revenue. However, the reason why it is essential that merchants fight chargebacks goes beyond just recovering revenue.

Fighting friendly fraud helps reeducate consumers.

When chargebacks go unchallenged, it trains consumers to believe there are no consequences for friendly fraud, which is why nearly half will do it again within 90 days. It is important that friendly fraudsters don’t succeed, and that means merchants need to fight back and expose consumers’ negative conduct.

If friendly fraud has a consequence, consumers will start to think twice before jumping to the dispute phase. Challenging unjustified chargebacks reveals consumer behaviors and introduces a consequence to discourage further attacks.

Ready to Fight Back?

While representment is an essential right for merchants, not all ‘professionals’ are capable of helping merchants in the way they deserve. Merchants must be cautious when choosing between different chargeback companies.

In fact, some companies will actively dissuade merchants from disputing chargebacks. This is because they don’t have access to Chargebacks911’s Intelligent Source Detection™. These ‘experts’ are unable to identify the true chargeback triggers and therefore, are unable to uphold the merchant’s representment rights.

If you’d like to start disputing chargebacks—recovering revenue, preventing future chargebacks, improving your reputation, ensuring sustainable growth—contact Chargebacks911® today.

Representment rights are ones you can’t afford to ignore. Don’t wait another second to take advantage of what’s rightfully yours.

Prevent Chargebacks.

Fight Fraud.

Recover Revenue.

Sources: LexisNexis® Risk Solutions, Javelin, Visa, Chargebacks911’s proprietary research

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