5 Successful Chargeback Reversal Tips
Table of Contents
- What are Chargeback Reversals?
- Always Analyze the Reason for Chargebacks
- Keep Excellent Documentation
- Make Sure Your Evidence is Compelling
- Submit the Right Documents for the Right Bank
- Hire Professional Chargeback Management Professionals
- Frequently Asked Questions
A credit card chargeback is supposed to be a last resort for a customer who has been cheated, mischarged, or mistreated. Consumers have the right to apply to have a credit card payment reversed if they can show they have tried everything possible to resolve their problem with the merchant.
Chargebacks damage your company’s standing with the credit card company. They expose you to fines, retentions, and the possible closure of your credit card processing account. You should put in place complaint handling procedures to prevent customer recourse to chargebacks. However, some people are never satisfied and, despite your best efforts, you will sooner or later incur a chargeback. Follow these simple tips to fight and win your chargebacks and win a reversal.
What are Chargeback Reversals?
A chargeback reversal is the possibility of taking a chargeback from an issuing bank and reversing it. This process, known as representment, is when the merchant resubmits the transaction to the bank with evidence that the transaction was legitimate.
When a customer disputes a charge, they go to their bank. They, and the bank, investigate the claim of fraud or theft and, if they find that there is evidence of that, reverse the transaction and debit the money from the merchant's acquiring bank through the card network.
During this process, the merchant can gather information regarding the transaction, including receipts, delivery confirmations, authorization notes, and other information... anything that can show the issuing bank that the transaction is legitimate.
With this information, the issuing bank can decide to uphold or reverse the chargeback.
Note that chargebacks will affect the marchant's standing with credit networks regardless if they have many of them. Additionally, merchants have an ethical obligation to refund money or honor chargebacks for true fraud cases.
However, merchants should absolutely fight chargebacks that are from friendly fraud, as when a customer tries to chargeback a transaction that they actually made to get free products.
Always Analyze the Reason for Chargebacks
Know why the customer filed the chargeback. The documents associated with the chargeback will tell you exactly why the customer filed the chargeback and the amount of money related to that chargeback. Look up this transaction in your Customer Relationship Management (CRM) software and see if you have made any notes about the respective customer.
Did the customer make any attempt to contact you? If you provided phone or email support, check the records to see if the customer had communicated with you. If the customer had contacted you, then find out how your team resolved the issue that the customer called or emailed you about.
Research the following information:
- What did the customer order?
- Was it delivered in proper condition and on time? Check the tracking number.
Take initiative and communicate with the customer. Call the customer to find out what exactly happened. Find out why the customer is unhappy and ask the customer what you can do to satisfy the customer.
Keep Excellent Documentation
Demonstrating that you behaved reasonably in all your dealings with the customer will help you to win a chargeback reversal.
The bank would require a cover letter when you file your chargeback dispute explaining what exactly happened in the transaction, what actions you had taken to resolve the case, if the customer had contacted you and why you are disputing the chargeback.
This letter, called the rebuttal letter, emphasizes the merchant's case for reversing the chargeback. It includes the reason code for the chargeback, all the evidence presented, and how that evidence demonstrates that the reason code provided is inaccurate.
Address the specific complaints of the customer in your cover. Also, pay attention to the requirements of any specific cover letter format of the bank involved in the chargeback.
Make Sure Your Evidence is Compelling
Compelling evidence will be a key element in any chargeback case.
Keep all your sales receipts filed. If you receive a written complaint, make sure you keep a copy of the letter you receive from the customer together with a copy of your reply and any original sales documentation, such as invoices, receipts, and guarantees. If the communication occurs in-person or over the phone, make a record of the conversation. Record the date and time of the encounter, the names of those involved, and an accurate summary of the conversation. If you arrived at an agreement with the customer, record that information.
File the cover letter along with a copy of the invoice, delivery confirmation, refund policy, product shipment/tracking information and any customer service notes. If your CRM shows that the billing and shipping addresses of the customer match, file the AVS match also. Make sure that the reference number for the chargeback dispute is displayed on all documents.
Submit the Right Documents for the Right Bank
Upload all documents online or fax them to the bank. After 7 to 10 business days, follow up with the bank regarding the status of the chargeback dispute.
After the dispute process is complete, make sure to blacklist the customer, who filed the dispute, in your system so that the specific customer does not process a transaction with your business and file a chargeback in the future.
Hire Professional Chargeback Management Professionals
Even if you are a sole trader, you don’t have to do everything yourself. Hire a chargeback management company to win chargeback disputes for you so you can focus on growing your business. An agency charges a percentage of your chargeback wins. The two biggest incentive to win chargeback reversals are your profits and your reputation. Partnering with a reputable chargeback management company helps you recover your lost revenue and maintaining the reputation of your business.
If you follow the tips listed in this article, you have increased your chances of winning your chargebacks and increasing your profits.
Can a chargeback be reversed?
What’s the difference between a reversal and a refund?