Tips for a Successful Chargeback Reversal

successful chargeback reversal

Win the Chargeback Reversal, Retain More Profits

Chargebacks are a drain on a company’s bottom line.  From the initial copy request to the chargeback reversal, the entire process is complicated and time consuming.

Reversing a chargeback is difficult, but not impossible. In fact, if you want to keep your business from closing up shop, you absolutely must fight against chargebacks.

The Importance of Disputing Chargebacks

Each time a consumer files a chargeback against your business, you have two options: you can accept the chargeback or you can dispute it. The act of fighting a chargeback (trying to obtain a chargeback reversal) is called representment.

Few merchants seek a chargeback reversal.

  • 28% of merchants contest all chargebacks
  • 42% of merchants contest less than half of all chargebacks
  • 14% of merchants never contest chargebacks
There are many factors that will help determine which option is best in a given situation. Should you accept the chargeback or fight it? In general, you want to dispute as many chargebacks as possible. The only exceptions would be if the chargeback was the result of verifiable credit card fraud or legitimate merchant error.

Chargeback reversals do three things. First, disputing a chargeback recoups profits—profits you never should have lost in the first place.

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Second, obtaining a chargeback reversal sends a powerful message to consumers and members of the credit card payment industry. Studies show 40% of consumers who successfully complete an illegitimate chargeback will file another within the next 90 days.

Banks need to be reminded that chargebacks are a last resort, and consumers need to know their actions aren’t ethical.

Third, chargeback representment helps improve the merchant's reputation at the issuing bank level. When chargebacks are filed, the bank assumes you are at fault. Disputing a chargeback is essentially denying the blame. Whereas, letting the chargeback stand is an admission. If you only dispute chargebacks in occasional situations, you are only occasionally faultless.

Tip #1: Prepare the Documentation

To successfully dispute a chargeback, you must provide adequate compelling evidence. If you don’t already have a proper chargeback management system in place, now is the time to get started. The first thing you’ll need to do is establish a proper filing system for necessary paperwork.

Compelling evidence helps prove the cardholder participated in the transaction, received the goods or services, or benefited from the transaction in some other way.

Obviously, you’ll always want to keep a copy of the sales receipt for all credit card transactions.  You should also hang on to all order forms, tracking numbers, emails, and other forms of communication with the customer.  If you require signed proof of delivery, those documents should be saved too.

Additional examples of compelling evidence that can be used to prove your case include:

  • Photographs that show the cardholder is in possession of the product
  • Details acquired from the cardholder's identification, obtained when the cardholder picked up products at the merchant's location
  • Proof the merchant’s website was accessed for services after the transaction date for digital goods
  • Information obtained from the staff directory or an employee’s email address with the company’s domain proving the person who signed for or authorized the purchase was indeed an employee of the company
  • Indications the cardholder did participate in the travel plans (evidence the boarding pass was scanned at the gate, additional purchases related to the original transaction like seat upgrades or extra baggage)
  • Evidence the cardholder’s IP address, email address, or other contact information had been associated with a previous, undisputed transaction
  • Evidence the person chose Dynamic Currency Conversion (like clicking an “agree” button or signing below the DCC statement on the sales receipt)
In general, the stronger your paper trail, the more effective your dispute will be.

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Tip #2: Write a Rebuttal Letter

When you receive notification of the chargeback, the letter (called a Chargeback Advice) will have an attached document (called a Chargeback Adjustment Reversal Request) that will help you prove your case.

You’ll want to write a professional, detailed, fact-oriented letter to accompany your compelling evidence. Be sure to check our detailed blog article before composing your chargeback rebuttal letter.

Tip #3: Provide Prompt Attention

Both the merchant and the cardholder need to abide by a pre-determined chargeback time limit.  While the time limit for the cardholder will vary based on the credit card network, customers usually have between 45 and 120 calendar days to file a chargeback.

Again, the chargeback time limit will vary based on the merchant processor and other factors, but it is advisable for the merchant to act as soon as possible when presented with a chargeback.  The sooner merchants initiate the chargeback reversal process, the more likely they are to succeed.  Most documentation needs to be filed within 5 to 10 days of receiving notice of the chargeback.

Tip #4: Understanding the Reason

Each dispute is accompanied by a chargeback reason code.  Each credit card network has their own set of codes that help you identify the reason for the chargeback.

Make sure you take the time to really understand the reasoning behind the chargeback.  This will help you gather the relevant and necessary paperwork to dispute the claim.

If, sadly, you are unsuccessful in your attempt at a chargeback reversal, the reason codes will help you reduce chargebacks in the future.

Tip #5: Prevent Difficult Reversal Situations from Happening

As the saying goes, an ounce of prevention is worth a pound of cure.  Some chargebacks are easier to fight than others.  In these situations, it is best to avoid the difficult cases all together.

In general, chargebacks that originate in North America or Western Europe are easier to reverse.  However, chargebacks that come from Russia, Ukraine, and Indonesia are nearly impossible to win.  Therefore, it is advisable to carefully scrutinize the original transaction for any signs of fraud.

Tip #6: Learn From Your Mistakes

If you hope for a successful chargeback reversal, it is advisable to implement as many preventative measures as possible.  Combine those preemptive actions with an extra dose of knowledge and you’re far more likely to come out on top.

Carefully monitor the chargeback reason codes that are being issued most frequently. Devise a strategic and aggressive strategy to stop those chargebacks from happening. Then, you won’t have to worry as much about the chargeback reversal process!

Tip #7: Get Professional Help

While it is important to dispute as many chargebacks as possible, you shouldn’t necessarily be the one fighting. There are several reasons why a professional chargeback management solution is beneficial:

  • Filing chargeback reversal cases yourself means you’ve reallocated valuable resources that should be used to grow your business.
  • The credit card payment industry uses a complex language all its own. The technical jargon is difficult to understand and constantly evolving. Communicating with Bank X won’t involve the same nomenclature as Bank Y.
  • You don’t have the insider access necessary to “pull strings” and effectuate change.

Want to know exactly how many chargeback reversals you could win? Contact us today and we'll conduct a free ROI analysis.

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