Smart Chargeback Management™ & Chargeback Representment
What is a chargeback?
A chargeback occurs anytime a cardholder (customer) calls the credit card issuer instead of the merchant to dispute a transaction, saying they never received the goods or services, that they were faulty, not timely, never ordered, not as advertised, or for any other reason, and requests a full refund. The merchant is notified that the amount in question was debited from his account.
What is chargeback representment?
Chargeback representment is an industry term for presenting evidence to your acquiring bank or the customers’ credit card company that shows the purchases were made with the full knowledge of the card-holder. Other terms that may be used for this process are chargeback dispute, chargeback recovery, or chargeback fighting. (Note that in a case of true fraud, the merchant is held responsible for all charges. The customer whose card was stolen will not have to pay, and you have to absorb the loss.)
When a customer or issuing bank issues a chargeback, you will be sent the transaction information from the acquiring bank and be given a deadline to decide if you are going to dispute the chargeback or not. If you choose to fight it, you will need to send all of your documentation to the bank along with a chargeback rebuttal letter that outlines why you believe the chargeback is not valid.
The acquiring bank will then send your documents to the issuing bank, where experts in fraudulent charges will weigh the evidence you’ve provided. If these professionals find in your favor, the chargeback will be reversed. If they do not believe you’ve supplied enough evidence, however, the money will be removed from your account.
Tips on effective chargeback representment
The first step to effective chargeback representment is to research the reason code which explains the reason for the chargeback. Then, prepare compelling evidence: anything you can produce that shows the attempts made at consumer identification, emails about the order, tracking numbers that confirm delivery, etc.
You should then write a detailed rebuttal letter, indicating your intent to fight the chargeback, and list why. And all of this must be done very quickly, as merchants often have only 5-10 days to respond to a chargeback claim.
If that seems like a lot, it is. You likely will find that if you're experiencing more chargebacks than 0.5 to one percent of your monthly business, you should consider a chargeback representment company, like Chargeback Gurus.
The real cost of chargebacks
If you lose a chargeback dispute, you may end up losing much more than just the value of the product. The cost of a real chargeback is shown below, using the example of a merchant selling a camera:
Camera Cost: $450.00
Shipping Cost: $10.00
Credit Card Fees: $13.50
Customer Service Fees: $3.50
Business Overhead: $5.00
Total cost: $482.00
Chargeback Fees: $45.00
Total Cost of Chargeback: $527.00
The merchant ends up losing much more than just the cost of the camera and the shipping charges. The final amount is at least 120% of the actual product cost. The costs increase if the merchant disputes the chargeback on their own.
In-house vs. outsourced chargeback representment
Even a dedicated in-house team does not have the time to stay aware of constantly changing regulations and requirements for challenging a chargeback - the rules have changed more in the last 5 years than in the previous 45 years, and are expected to change even more in the next five. An in-house team also won't have the tools and analytics to identify where and why the problems are happening that lead to the chargebacks.
A chargeback representment company is able to provide all the right tools and reports to identify the problem, and is better equipped to fight the chargebacks you currently have. That's why it's very important to work with not just any representative - you need an experienced chargeback recovery team. You want somebody who's from the payment industry, somebody who has exposure to the technology, somebody who has exposure to identifying root causes and vulnerabilities in your business, to help you successfully recover chargebacks and fraud, and prevent future occurrences.
If you discover that your in-house team is not winning at least 50% of all cases, then you are losing a good amount of money. It may be time to outsource your chargeback work to an experienced representment company.
Why choose Chargeback Gurus for your chargeback representment?
Our clients love working with Chargeback Gurus because…
- We have 14+ years' industry experience
- We win up to 83% of chargeback cases
- We have recovered millions of dollars in chargeback representment
- We digitize all chargeback dispute documents for on-time dispute filing
- We provide access to an online chargeback tracker to track your recovered revenue
- We provide 10+ analytical reports to monitor/reduce your chargebacks
- We employ experienced chargeback specialists to fight for you
- We create bullet proof business processes to help you reduce & win chargebacks
- We assign a dedicated account manager to increase your ROI
To start an estimate on how much you could net from hiring Chargeback Gurus, please fill the form. The Guru Guarantee™: you net a gain or walk away.