Write a Chargeback Representment for Dispute Response

Are chargebacks reducing your revenue and disrupting business operations? 

For merchants, disputing chargebacks is a challenging task. The chargeback representment process is the best chance to recover lost funds, but it requires a clear understanding of how to build a compelling case.

Our guide will discuss the essential steps of writing a strong chargeback representment. From identifying the reason code to submitting a well-prepared response, you’ll learn how to effectively challenge chargebacks and improve chances of success.

What is Chargeback Representment?

Chargeback representment is the formal process where a merchant disputes a chargeback claim made by a cardholder. It involves submitting evidence to the issuing bank, challenging the legitimacy of the chargeback, and proving that the original transaction was valid. 

The goal of the representment process is to reverse an unjustified chargeback and recover the funds deducted from the merchant’s account. This process is crucial for protecting businesses from friendly fraud or mistaken chargebacks, ensuring that revenue isn't lost.

In the representment process, the merchant must provide compelling evidence such as transaction records, proof of delivery, customer communications, and other relevant documents to support the claim that the chargeback was issued in error. If the evidence is strong enough, the chargeback may be reversed, and the funds restored to the merchant.

Why is Representment Necessary?

Representment is necessary to protect merchants from fraudulent or invalid chargebacks. Without disputing illegitimate chargebacks, businesses face significant financial losses, such as lost revenue, fees, and damage to the merchant’s standing with payment processors.

In some cases, customers may file chargebacks as a form of "friendly fraud," where they claim they didn’t authorize a legitimate transaction or received goods/services they did not. Representment allows merchants to provide evidence that disproves these claims, safeguarding their revenue and reducing the impact of chargebacks on their financial health.

Beyond financial losses, excessive chargebacks lead to higher chargeback ratios potentially resulting in higher fees or even account termination. Representment is a key tool in reducing chargeback ratios and maintaining business’s financial health.

What Happens Before Representment?

Before the representment process begins, several steps occur that allow for potential resolution without escalation. Initially, the cardholder disputes the transaction, which prompts the issuing bank to investigate. 

During this investigation, the bank reaches out to the merchant’s acquiring bank to gather transaction details and validate the claim.

The merchant is notified of the chargeback and allowed to provide information regarding the transaction. At this stage, the merchant must review the reason code provided by the issuing bank, as it determines the grounds on which the chargeback was filed. Based on this reason code, the merchant prepares their response.

If the chargeback is valid, the funds are returned to the cardholder. However, if the merchant believes the chargeback is unjustified, they initiate the representment process by submitting the necessary evidence to dispute the claim.

Steps to Write a Winning Chargeback Representment

Crafting an effective chargeback representment involves following a structured process to ensure the best possible outcome. Each step is crucial to presenting a compelling case that can reverse an illegitimate chargeback. 

Here's how to follow the process:

1. Platform Response Time Limit

The first critical step is to be aware of the platform-specific time limits for responding to chargebacks. Issuing banks and card networks provide a limited window during which merchants can submit a representment. These timeframes typically range from 20 to 45 days, depending on the card network or payment processor involved. Failing to respond within this period results in automatic acceptance of the chargeback, leaving the merchant with no further recourse.

Merchants should act swiftly once they receive a chargeback notification, ensuring they have enough time to gather the necessary evidence and prepare their response. Using automated tools that track chargeback deadlines can help businesses stay within the required time limits.

2. Identify Reason Code

Every chargeback is accompanied by a reason code, which indicates why the chargeback was filed. Understanding the reason code is essential, as it dictates the type of evidence required and the arguments that need to be made in the representment. Common reason codes include claims of fraud, goods not received, or services not as described.

Different card networks use slightly different reason codes, but all codes serve the same function — to explain the cause of the chargeback. Merchants must review these codes carefully to tailor their response accordingly. For example, if the chargeback reason is a "fraudulent transaction," the merchant might need to provide proof of customer authorization and verify that the transaction was legitimate.

3. Collect and Compile Evidence

Evidence is the foundation of a successful chargeback representment. Merchants must compile all relevant documentation to refute the chargeback claim. The type of evidence required depends on the nature of the dispute, but generally includes:

• Proof of delivery or service fulfillment
• Invoices or receipts
• Signed contracts or agreements
• Communications with the customer (emails, messages)
• Transaction records, including timestamps, IP addresses, and device information
• Any other supporting documentation that can verify the legitimacy of the transaction

Merchants should organize the evidence clearly and provide detailed explanations for each piece, ensuring the issuing bank or card network understands how the evidence supports their case.

4. Draft a Rebuttal Letter

The rebuttal letter is a formal response that outlines the merchant’s position and explains why the chargeback is invalid. It should directly address the chargeback reason code, referencing the relevant evidence in a clear, concise manner.

A well-crafted rebuttal letter should:

• Begin by stating the chargeback dispute reference number and the reason for the representment.
• Explain why the chargeback is not valid, addressing the customer’s claims and providing factual counterarguments.
• Reference key pieces of evidence that support the merchant’s case.
• Conclude with a formal request to reverse the chargeback.

The tone of the rebuttal letter must be professional and fact-based, avoiding emotional or accusatory language. It's important to keep the focus on facts and documentation.

5. Submit Your Representment

Once the rebuttal letter and evidence are ready, the final step is to submit the representment to the acquiring bank or card network within the platform’s designated time limits. Ensure all required forms, documentation, and evidence are properly attached and formatted as per the platform’s guidelines.

Upon submission, the issuing bank will review the representment and the evidence provided. The bank may then either uphold the chargeback or rule in favor of the merchant, reversing the chargeback and returning the funds.

The outcome of a representment can take several weeks, so merchants should monitor the status of their case closely and be prepared for any follow-up requests for additional information.

How to Gauge Representment Success

The success of a chargeback representment can be measured by whether the disputed chargeback is reversed, allowing the merchant to recover lost funds. Key indicators of success include:

1. Chargeback Reversal: The most straightforward sign of success is when the issuing bank rules in favor of the merchant and returns the disputed funds.
2. Improved Win Rate: Tracking your chargeback win rate over time provides a broader view of representment success. A higher win rate suggests effective dispute management strategies.
3. Reduced Chargeback Ratio: Successfully disputing chargebacks helps lower the overall chargeback ratio, reducing the risk of penalties from payment processors.
4. Fewer Second Chargebacks: If customers refrain from filing a second chargeback after losing the initial dispute, it indicates a strong representment case with compelling evidence.

Monitoring these factors allows businesses to refine their representment strategies and continuously improve their defense against chargebacks.

ChargePay Representment Template for Shopify Stores

Here is an example template that Shopify store owners can use when submitting a chargeback representment through ChargePay. This template helps ensure all necessary information is included in a professional, clear, and well-organized manner:

Subject: Chargeback Representment for Transaction [Transaction ID]

To: [Issuing Bank or Card Network Name]
From: [Merchant Name]
Date: [Date of Submission]
Chargeback Dispute Reference: [Chargeback Case Number]
Transaction ID: [Transaction ID]
Reason Code: [Chargeback Reason Code]
Customer Name: [Customer Name]
Transaction Date: [Date of Transaction]
Amount: [Transaction Amount]

Dear [Issuing Bank/Card Network],

I am writing to formally dispute the chargeback for the transaction referenced above. After reviewing the details of this chargeback, I believe it to be invalid and am submitting this representment with supporting evidence to demonstrate the legitimacy of the transaction.

Reason for Dispute:
[Provide a brief explanation of why the chargeback is being disputed, referencing the chargeback reason code. Example: The chargeback was filed under reason code [Reason Code] for "goods not received." However, the order was delivered to the customer, and I have provided proof of delivery.]

Supporting Evidence:
Below is a list of the evidence provided to support my representment:

1. Proof of Delivery: [Attach tracking information, delivery confirmation, or signed receipt]
2. Invoice/Receipt: [Include a copy of the original sales invoice or receipt]
3. Customer Communication: [Attach email correspondence, chat logs, or any relevant communication]
4. Transaction Record: [Provide transaction details such as date, amount, IP address, and device fingerprint]
5. Customer Agreement: [If applicable, include signed contracts or agreements related to the transaction]

Explanation of Evidence:
[Give a brief explanation of how the provided evidence supports your case. Example: The attached tracking details clearly show that the goods were delivered to the customer’s verified address on [Delivery Date]. Additionally, the customer confirmed receipt of the order via email, as shown in the attached communication.]

Based on the above information and the provided evidence, I respectfully request that the chargeback be reversed and the funds returned to my account.

Thank you for your consideration. Please do not hesitate to reach out if further information or clarification is needed.

Sincerely,
[Your Full Name]
[Your Business Name]
[Contact Information]

Note: Customize this template based on the specifics of the chargeback and include any additional documentation relevant to the dispute. ChargePay automates much of this process, but the structure remains key to presenting a clear and compelling case.

Automate Your Response with ChargePay

Handling chargeback representments manually is time-consuming and prone to errors. With ChargePay, businesses streamline the entire dispute process. 

ChargePay’s AI-driven platform automates key steps, such as identifying reason codes, gathering evidence, drafting rebuttal letters, and submitting representments to issuing banks. 

By reducing manual work and eliminating delays, ChargePay improves the accuracy and efficiency of responses, increasing the chances of winning disputes.

Additionally, ChargePay continuously learns from new data, refining its fraud detection and representment strategies with evolving chargeback trends. 

Whether you run a small Shopify store or manage high transaction volumes, ChargePay enables you to focus on growing your business while handling chargebacks with confidence.

Request a ChargePay demo today to revolutionize your chargeback management process!