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Chargeback Representment Resources Hub

A merchant guide to recovering revenue through chargeback representment. We explain how it works, and show you how to increase your chances of winning.

The Chargeback Representment Process Explained

The Chargeback Representment Process Explained

So, you’ve received a customer chargeback.

Your first reaction is probably a mix of frustration and confusion. You want to know what went wrong, so you study the documentation. That’s when you realize that nothing went “wrong.” The customer is just making a false claim (a practice called friendly fraud). That frustration is quickly turning to anger…but what can you do?

Chargeback representment is your opportunity to recover revenue from invalid customer disputes. It’s a complex, but vital process that can play a crucial role in your long-term business sustainability.

In this post, we’ll define what representment is and explain its importance. We’ll also walk you through the representment process and provide insight on what it takes to win a reversal.

What Is Representment?

Chargeback Representment

[noun]/* chahrj • bak • reprə • zent • ment /

Chargeback representment is a strictly-regulated process for fighting an invalid payment card chargeback. Representment involves submitting evidence to the bank proving that a transaction was valid, and that the cardholder’s claim should be overturned.

Modern consumers have discovered loopholes that allow them to file unwarranted chargeback claims. In fact, an estimated 80% or more of all disputes come from invalid customer issues, making friendly fraud one of the biggest ongoing threats to your revenue.

Cardholders have a right to dispute a transaction. That said, you have the right to challenge those disputes. It’s your right to defend a valid transaction and recover revenue otherwise lost due to an illegitimate chargeback claim.

Chargeback representment is a powerful tool you can use to contest illegitimate chargebacks and potentially win a reversal. In broad terms, representment refers to the process of fighting a chargeback. You literally “re-present” the transaction to the bank and card network, along with evidence to support your claim.

What Options Do You Have Regarding Chargebacks?

You have two options with every dispute:

Accept the Chargeback

Accept the Chargeback

This is the quickest way to be done with it. However, you lose the sales revenue, the merchandise or service provided, and the wholesale cost of the goods. You’re also responsible for any associated fees and expenses like shipping, packaging, fulfillment, and interchange.

Fight the Chargeback

Fight the Chargeback

You can contest the claim through the representment process. If you produce evidence to prove that the customer’s claim is unwarranted, the bank will reverse the chargeback and return the funds to your account.

You’ll still be responsible for paying a chargeback fee to cover your acquirer’s administration costs, even if the chargeback claim is invalid. However, the chance to clear your name and recover your revenue through a chargeback reversal is worth the investment.

Why Should You Re-Present?

The most obvious reason to challenge a dispute is to recover funds that are rightfully yours. Merchants like you lose billions of dollars every year to chargeback abuse. Representment will let you recover some of that money.

Even beyond the financial loss, you will always stand to lose more if you don’t fight back. For instance, a string of unchallenged chargebacks makes you look like a risk to banks. This could lead to higher fees, and could even make it harder to find a processor or acquirer who’s willing to work with you.

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Ignoring friendly fraud has another, wider effect, as well. In consumers’ minds, it reinforces the idea that the behavior is acceptable. This explains why nearly half of consumers who get away with friendly fraud will do it again within 90 days. If an action offers a reward but no consequences, there’s no incentive to stop doing it.

Over the long haul, contesting invalid chargebacks on a consistent basis will have a positive impact on your bottom line. It lets you protect your good reputation with banks and consumers, and lower the number of chargebacks you’ll see in the future.

What Happens Before Representment?

Before you can re-present a chargeback, you have to identify where the chargeback came from. This can be a little tricky.

The dispute process can be initiated by a cardholder complaint. It can also start if the issuer detects a problem with the transaction. In both cases, the decision to file a chargeback ultimately rests with the issuing bank.

The acquirer will receive the claim from the issuer, who passes it along to you. Your first step is to identify the chargeback reason code, which is a kind of shorthand that indicates why the transaction is being disputed. The reason code may not reflect the true reason for the chargeback. Nevertheless, you must respond to the chargeback based on the given code.

Build & Submit a Representment Case in 4 Steps

Now that you understand the basic concept: how do you actually get started?

Let’s examine the representment process, step-by-step. After you receive a chargeback, identify the reason code, and determine whether you should fight, these are the next steps to take:

Step 01 | Note the Response Time Limit

You have a very limited window for responding to a chargeback. That time frame is critical. If your submission gets pushed even one day past the deadline, you will automatically forfeit the case. The amount of time you have will vary by card scheme and reason code. You need to look for specifics attached to the dispute notification.

Your bank may send you a form called the Chargeback Debit Advice Letter. This should provide a straightforward outline for when and how to respond to the specific reason code.

Learn more about representment time limits

Step 02 | Assemble Compelling Evidence

To win a chargeback representment, you’ll need to provide what banks call “compelling evidence.” Again, acceptable evidence can vary a lot based on the bank, card network, and reason code. Common examples of compelling evidence include:

  • Copies of the sales receipt and/or order forms
  • Tracking numbers and proof of delivery
  • A copy of your return policy, with proof it is easily accessible on your site
  • Descriptions and screenshots of items as they appear on your site
  • Any communications indicating successful delivery or customer satisfaction

Remember: all evidence must be in response to the given reason/reason code, even if you believe that reason to be false.

Learn more about compelling evidence

Step 03 | Draft a Rebuttal Letter

Along with the documents supporting your case, you must submit a formal outline of the case called a chargeback rebuttal letter. This should include a summary of your evidence, and show how it collectively proves the transaction is valid.

Rebuttal letters should be concise and free of emotion. Just present the facts in a clear, professional, and dispassionate manner. Always avoid overblown explanations, and don’t try to rant about whether or not the process is “fair.”

Learn more about chargeback rebuttal letters

Step 04 | Compile Forms & Submit Your Representment

All evidence must be submitted to your acquiring bank, which will pass it along to the issuing bank. The issuer then reviews the case and makes a ruling.

Once again, we have to stress the importance of keeping up with deadlines, following the bank’s specific mandates, and providing sufficient evidence. Ignoring any of these means the chargeback representment will fail.

You may also need to include supporting documents as well. These can include a Chargeback Adjustment Reversal Request, a Chargeback Debit Advice Letter, and more.

Learn more about chargeback documents & forms
Writing Winning Chargeback Rebuttal Letters

Writing Winning
Chargeback Rebuttal Letters

Learn how to create a winning debit or credit card chargeback rebuttal letter. Download our rebuttal letter template and writing checklist today.

Free Download

Improve Your Odds of Winning

Winning a chargeback representment is not impossible...but it’s not easy. To stack the odds in your favor, consider the following tips:

  • Understand the system: Know and understand the most current applicable chargeback representment regulations before a dispute happens.
  • Create a filing system: Devise a system for collecting and organizing essential documents so they can be located quickly.
  • Don’t waste any time: To meet the tight deadlines of representment, you must gather evidence and respond as quickly as possible.
  • Know the codes: To know what to submit, you’ll need to stay current on all the most recent, specific reason codes for each card network.
  • Tell your side of the story: The rebuttal letter is the cornerstone of your representment case. Keep the wording clear, concise, and professional.
  • Don’t rely on automation: Automated systems can streamline the representment process, but their inflexibility will mean incomplete or inaccurate responses.
  • Get to know the bank: Consult with multiple issuing banks to determine the best way to respond. Pattern your cases based on what you learn.
  • Fight all your battles: Responding to every illegitimate dispute is the best way to maximize revenue retention and protect your reputation.

Finally, and most importantly: Do the follow-up.

It can be hard to obtain—let alone analyze—your representment results. That said, you have to put the effort in to track patterns, risks, and key performance indicators (KPIs). You have to learn what is or isn’t working, and how much ROI you’re receiving.

For more on this, check out our detailed blog article on chargeback report options.

What Happens After Representment?

If you submit a representment, the issuer will examine your evidence and make a decision. They will either:

  • Rule in your favor, reverse the initial chargeback and close the case.
  • Rule in favor of the cardholder and reject your claim based on the original evidence.
  • Rule in favor of the cardholder and reject your claim based on new evidence.

The average merchant has a representment win rate of 32%, according to survey data. In other words, more than two-thirds of chargeback cases will get rejected by the bank, resulting in a second chargeback. This is known as a “pre-arbitration” or “pre-arb” chargeback, depending on the card brand.

Second Chargebacks & Pre-Arbitration

Unfortunately, even if you win a reversal, you’re not in the clear. If new evidence has been presented, the issuer or customer can dispute the transaction a second time.

As with the initial claim, you can choose to accept the chargeback. In some cases, this might be your best option. If you believe the case is worth pursuing, the major card networks will allow you to respond to a second chargeback. Essentially, you’ll need new evidence to refute any new evidence.

If the dispute can’t be resolved to the satisfaction of all parties, it can be escalated to arbitration. The card network is asked to step in, review the case, and make a final judgment. Due to the additional time and expense involved with arbitration, it’s typically reserved for high-value transactions.

Learn more about chargeback arbitration

One Last Option: Debt Collection

Losing an arbitration case doesn’t mean you’re totally out of options. In some outlier instances, you may be able to pursue the cardholder through the legal process.

With representment, you’re asking the issuer to reevaluate the cardholder’s claim based on your evidence. With debt collection, however, you’re attempting to recover outstanding debts through the courts.

Obviously, it makes more sense to try and win a reversal first. But if that fails, debt collection may still be an option if the goods or services in question justify the costs.

Learn more about chargeback debt collection

Solving the Challenges of Chargeback Representment

Here’s the sad truth: the chances of winning a chargeback reversal on your own are dishearteningly low.

Complex regulations and limited time frames make it hard to present a single chargeback reversal case…let alone prepare multiple cases on an ongoing basis. Plus, there are other barriers to handling representment as part of your day-to-day operations:

  • You won’t fully understand the fast-changing terms, detailed scheme regulations, or trends in consumer behaviors.
  • You won’t be able to stay ahead of evolving fraud tactics.
  • You could do more harm than good with an over-aggressive approach to representment.
  • You won’t have access to proper intelligence and analysis.
  • You’ll spend time and resources dealing with past issues which should be spent ensuring future growth.

here’s good news, though: 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 exactly how successful your chargeback representment efforts could be? Contact us today for a free, no-obligation ROI analysis.

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