How to Create the Best Chargeback Responses

In the world of chargebacks, card networks almost always side with cardholders. Merchants are left to foot the bill for costly misunderstandings, buyer’s remorse, or chargeback fraud. It may feel as though the odds are stacked against you. However, rather than accept the losses from chargebacks, crafting a complete and well thought out chargeback response may mean the difference between significant loss for your company and a sizable percentage of recovered revenue.

Chargeback responses, or representments, consist of evidence compiled by a merchant to refute a cardholder’s claims. Depending upon the reason for the chargeback, the information gathered may vary—here are 8 tips for crafting a successful dispute response:

Straight to the point

Large numbers of merchant chargeback responses are reviewed by issuers and banks every day. A lengthy introduction about your product and your company history isn’t going to make your responses more compelling. Instead, stick to the facts surrounding the original sale. For example: “John Doe purchased this product from our company on this date using their credit card. They agreed to our terms of service, and authorized this transaction. We shipped the product to the address provided by the customer…” You get the point.

Make it easy

The individual handing the manual review of your response is going to decide fairly quickly whether or not the evidence is sufficient to refute the cardholder’s claims. Make their job easier by highlighting or bolding important points, including a table of contents, and keeping it short if at all possible. A twenty page long terms-of-service agreement won’t matter much if the person has to go hunting for the cancellation or refund policy.

Details matter

While keeping your response concise is great, don’t leave out relevant data that could be the difference between compelling evidence and an incomplete response. Review and implement quality control on your responses to ensure data isn’t missing or incorrect. Issuers are very particular about the information they want to see. Think to yourself, “If I was reviewing this response, would I find the evidence compelling?” Just like a case in court, you are compiling key pieces of evidence to refute the cardholder’s claims. Bolster your case with some added details, like phone logs, email correspondences, LinkedIn profiles, and any additional information that validates the cardholder’s identity and shows the cardholder was aware of the transaction.

Show proof of authorization

Fraud or ‘no authorization’ chargebacks account for 56% of all chargebacks. Proving the cardholder was aware of and authorized the transaction being disputed is critical. Any data that shows proof of this, such as AVS (address verification system) matches, CVV confirmations, signed receipts or contracts, or an originating IP matching the customer’s location are a must.

Most banks won’t even consider the rest of your response without this information.

Show proof of service/delivery

Non-fraud related chargebacks can also cause significant impact on profit margins. Claims from cardholders that products are of poor quality or defective could be good indicators of poor quality control while claims that they never received their product could be a sign of a faulty order fulfillment system or an unreliable shipper. Assuming that your company did everything correct, you’ll want to provide proof of service. If it is physical goods, provide proof of shipment and delivery. If at all possible, choose a carrier that requires signed receipt of merchandise. If the bill to name is different than the ship to name, be prepared to provide documentation explaining why they are different. If the dispute is on digital goods, provide evidence such as an IP log or system notes to prove the customer used the software or service.

Include terms of service and refund policy

Fine print matters. Providing proof that cardholders agreed to your terms and/or did not follow protocol when it comes to returns or refunds is essential. Require customers to agree to your terms before they make a purchase and include a checkbox they can tick when checking out. Highlight relevant areas of your terms to help key in on specific verbiage.

Include the case number

This one is simple. Include the case number or case ID assigned to a chargeback on every page of your response. This is a network requirement and if not followed, could render a page—or even a whole response—null.

Successful transmission

Once your chargeback response is complete, you’ll need to get this information to your processor or acquiring bank through various channels. Some offer an online upload feature or an SFTP option, some require responses be sent via email, but most banks receive responses through fax. Before sending your response, ensure that any text or images are dark enough and will show up clearly in the fax transmission as any illegible text or data will be considered incomplete.

While chargebacks are unavoidable and crafting the best chargeback response may not always be simple, these tips can help you recoup as much revenue as possible. Check out our chargeback response templates to help streamline your case creation process.

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