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Chargeback Representment - A Successful Recipe for Fighting Chargebacks

Chargeback Representment: A Successful Recipe for Fighting Chargebacks

Fighting chargebacks isn’t just about winning back the amount of a single disputed transaction. Fees and overhead mean that the real cost is often up to three times higher than the original transaction. Chargebacks can threaten more than just your revenue. Payment processors have chargeback thresholds and will shut down merchants who exceed them for too long. Every year, e-commerce merchants see more and more chargebacks, and smart merchants know that fighting chargebacks is key to protecting their bottom line and staying in their payment processor’s good graces.

Many consumers file chargebacks for false or baseless reasons and merchants who know how to fight them have an excellent chance of beating them, recovering their revenue.

Unfortunately, there’s no “surefire way” to beat illegitimate chargebacks. The process of fighting chargebacks, known as chargeback representment, involves many variables. Each card network sets its own rules. Each issuing bank has its way of interpreting and implementing those rules, and everything ultimately hinges on the ‘reason code’ that gets assigned to the customer’ explanation for their dispute.

There isn’t a one-size-fits-all solution with a complex problem like chargebacks; however, there is a recipe for success for chargeback dispute resolution that provides the best chances for success.

Know the Reasons Behind Your Chargebacks

All card networks (Visa, MasterCard, American Express, and Discover) require that each chargeback carry a specific reason code. These codes are not uniform; each network has its own unique set. Understanding reason codes is vital to analyzing chargebacks and tracing their underlying causes. With that said, reason codes are not always truthful or accurate.

Cardholders file friendly fraud disputes for a variety of reasons. Some do so intentionally, to benefit themselves, others do so out of ignorance or confusion. Either way, the reason code that the merchant sees is based entirely on the story the cardholder tells their bank and may bear little to no relation to the truth. Merchants who fail to detect and fight these false chargebacks stand to lose up to 40% of their revenue, so you must investigate the real circumstances behind your chargebacks.

While their attached reason codes categorize chargebacks during the representment process, the merchant needs to have a separate system to classify them by their actual cause. Doing so will help them define patterns that will help reduce their overall chargeback count.

Almost all chargebacks fall into one of three different categories:

True Fraud

When credit card credentials are stolen and used by a third party, the resulting chargeback is considered “true fraud.” These are legitimate chargebacks for which the merchant is liable. Merchants should not try to fight these chargebacks, but instead, seek ways to strengthen their anti-fraud measures to prevent future true fraud chargebacks.

Friendly Fraud

Only about 25% of chargebacks carrying true fraud reason codes and are, in fact, true fraud. The other 75% of chargebacks are what’s known as friendly fraud; when a cardholder uses false claims to file a chargeback. Many consumers who wouldn’t otherwise think of themselves as fraudsters will resort to friendly fraud if they feel it’s too time-consuming or difficult to resolve a product issue with the merchant directly.

Most friendly fraud disputes can be fought and won if you have documentation that proves you verified the purchaser’s identity and authenticated the transaction correctly.

Family Fraud

Family fraud is a subcategory of friendly fraud that refers to situations where the cardholder reports their credit card as stolen, when in fact, it was used without permission by a family member. If the merchant can prove that a spouse or child made the purchase, the cardholder is liable for any transactions as it is not considered fraud.

Merchant Error

Less common than true or friendly fraud, merchant error chargebacks result from situations where the merchant failed to deliver goods/services that were purchased or had poor product quality or customer service issues. Examples include overcharging, neglecting to ship an order on time, faulty product, subpar customer service, or withholding a refund due. Merchants can’t win these disputes if the claims are valid, they should put their energy into improving the flawed procedures that led to these chargebacks in the first place.

Compile the Right Compelling Evidence

The right or compelling evidence will depend on the cardholder’s specific claims and the reason code the issuing bank assigned. The card networks have provided merchants with general guidelines for what typically counts as compelling evidence for merchant disputes in several business categories including:


Buyer’s remorse drives many chargebacks in the retail world, especially for luxury goods and other high-value purchases. You can beat these chargebacks if you can prove you verified the customer’s identity at checkout time. When you sell a big-ticket item, it’s a good idea to ask if you can make a copy of the customer’s ID so you can keep it on file if they ever file a chargeback.

Physical Goods

Signed proof of delivery is the best evidence against “product not received” chargebacks. Still, if that doesn’t exist, you can get creative by submitting evidence such as photos showing the cardholder using or wearing the product. As with all online transactions, proof of AVS and CVV matching can work to beat chargebacks based on false claims of fraud.

Digital Goods and Subscriptions

Proving your case can be difficult when intangible digital goods are involved. With that said, you do have access to different forms of evidence. Logging customer IP address/GEO location, maintain login and usage logs provide substantial proof the cardholder received and used the services.


Merchants in transportation, hospitality, ticketing, and related industries can fight false claims of fraud with records of AVS and CVV matching for online orders and voice authorization for phone orders. Brokers may be able to obtain check-in information and other evidence from the hotels and airlines with whom they have business relationships.

Write a Winning Chargeback Rebuttal Letter

A mountain of evidence will amount to nothing if you are unable to put it in the right context for the person reviewing it. Every representment must include a clear and concise rebuttal letter that lays out your case and explains why the chargeback is invalid.

Issuing banks deal with a considerable volume of disputes, and, likely, the person deciding your case will only have a few minutes to read your letter and review the supporting documentation. If they can’t immediately grasp the argument you’re making and how the documentation supports it, you probably won’t win the case.

Use your rebuttal letter to make a brief and easy-to-understand case that the reviewer will easily digest. Keep the explanation to a single page, write short paragraphs, use bullet points, highlight your key points, and provide attachments that prove each point on the first page.

Fighting Chargebacks to Win Them

Having a recipe for success for fighting chargebacks can make a massive difference for merchants. Still, it won’t be useful if you aren’t able to modify and adapt it as you learn new information about where your chargebacks are coming from and what isn’t working in representment.

Many merchants, for example, have merchant accounts with several different banks. You might get four separate chargebacks with the same reason code, but each one is handled by a different pair of issuers and acquirers. Documents that work as winning evidence for one processor or issuing bank may not work with others. They all interpret the card network rules differently, even though they’re all based on the same reason with similar evidence,

A truly effective strategy for fighting chargebacks will take all these little differences into account. With time and experience, you’ll discover what works for various banks and reason codes, provided you’re tracking and analyzing your outcomes. You’ll learn things like which acquirers are slow to notify you of chargebacks, which card networks have the most impact on your win/loss ratio, and which of your products lead to the most chargebacks.

By analyzing all these metrics related to issuers, acquirers, card networks, and products, you can make better decisions about which chargebacks to fight, what evidence to select, and how to state your case. Having a solid strategy will increase your odds of winning and give you insights into changes you might want to make to your business practices, products, and possibly banking relationships. Doing this analytical work takes some time and effort; however, it is essential to maximize your win rate and recover as much revenue as possible.

How to Simplify Your Chargeback Dispute Resolution

The right chargeback company will provide the tools you need to successfully fight chargebacks, along with the knowledge and insights that tell you how to put those tools to best use. They'll also never leave you in the dark when it comes to representment packages, win/loss rates and performance.

DisputeGenius (from MidMetrics) is an intelligent chargeback representment platform that helps you to streamline fighting chargebacks, recover more revenue and analyze performance in real-time. It automatically pulls in essential chargeback and transactional details to quickly resolve disputes or dynamically develop representment packages (including your chargeback rebuttal letter and compelling evidence) and submit them. The Resolution Action and Case Documentation are also kept for your records.

With DisputeGenius, you can normalize and bring consistency to your process and regain control over your representments. We also offer full data transparency (i.e. representment packages, real-time win/loss rates, ROI and other deep insights) so you can test different methods and determine what's working and what's not.

MidMetrics provides all the essentials of chargeback representment, along with a full suite of our own proprietary chargeback management tools. We offer comprehensive Management Dashboards, In-Depth Analytics Tools, and On-Demand Reports. With MidMetrics, you get a single powerful platform you can use to manage your chargebacks and protect your merchant accounts.

Want to see MidMetrics in action? Book a demo with one of our chargeback specialists today.


With a complex problem like chargebacks, there are no one-size-fits-all solutions, but there is a winning formula for representment in chargebacks that will give you the best chance for success. Follow the guidelines in our new guide, The Winning Formula to Fight Chargebacks & Recover Lost Revenue.

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