You, the merchant, have received a chargeback notification.
It turns out that you don’t think the chargeback is valid. What do you do about it?
Representment. That’s the process of getting the chargeback reversed and getting your money back.
But winning a representment can be difficult.
Pre-representment. Representment. Post-representment (arbitration).
It all gets quite confusing.
This article will help you get it sorted.
Don’t worry. Once understood, representment is a straightforward process. However, it does not guarantee you will win the decision. That’s up to the bank or card processor. You must present convincing evidence that the transaction was valid.
Still, you can give it your best shot. If your evidence is compelling, you have a good chance of getting your money back.
I’ve broken the process down into three stages:
- Pre-representment
- Representment
- Post-representment (arbitration)
Let’s see how it all works.
I’ll start at the beginning.
1. Pre-representment
Before the formal initiation of the representment process, there are four crucial steps to perform. Each builds toward filing your complete representment package.
Receive the Chargeback Notification
The process is kicked off when you receive a chargeback notification.
You’ve likely seen one of these before.
The notification contains information that you need in order to fight the chargeback.
Chargeback notification information includes your merchant identification, plus transaction, chargeback, and cardholder details.
At this stage, you’re interested in the chargeback details.
Review the Chargeback
It’s in this step that you decide whether or not to fight the chargeback.
In the chargeback details section, you’ll find the Reason Code.
A reason code tells why the chargeback occurred. It contains a four-digit number and a few words of description.
If, based on the reason code and transaction details, you determine to fight the chargeback, you must focus all attention on gathering evidence as it relates to the reason code. Only rebuttal relevant to this reason code is allowed for your defence. In essence, you are defending against the reason code.
Now you must do your homework.
Gather Relevant Documentation
In this step, you compile the evidence you’ve collected about the disputed transaction.
Gather all the documents that can prove the transaction was valid and that the customer (cardholder) received the product or service as described.
- Sales receipts
- Contracts
- Email correspondence
- Delivery confirmation
- Proof of service provided
- Any other relevant evidence
Hopefully, all this information was stored at the time of the transaction. If not, you may need to further automate your transaction process. You’ll need this information every time you want to fight a chargeback through representment.
Prepare Your Rebuttal
Your rebuttal comes in the form of a formal detailed letter written to the bank. This Rebuttal Letter must contain all the relevant information from the chargeback notification, plus your defence arguments, which are supported by your evidence.
The elements of an effective rebuttal letter are:
Introduction and case identification: Include the chargeback case number, transaction details, and any other identifiers. Ensure that the context of the rebuttal is clearly matched to the correct dispute.
Merchant information: Provide your business's name, contact information, and any relevant merchant ID numbers. This verifies who is rebutting the chargeback.
Summary of the dispute: Summarize the dispute information, including the reason code. This is the start of your argument.
Detailed rebuttal against the chargeback reason (reason code): Offer a point-by-point narrative rebuttal to the chargeback, focused on the reason the dispute was lodged. Here is the heart of your argument, explaining why the chargeback is invalid.
Use all your facts and evidence to support your claims. Reference the evidence you gathered earlier and supply it in the next step.
The evidence supporting your case: Include here a discussion of the evidence you gathered—transaction records, proof of delivery, etc. Include anything that directly counters the chargeback claim.
Make it easy for the reviewer to link your rebuttal narrative to the evidence in the attachments. This makes your case much stronger.
The actual copies of the evidence will be provided as attachments to the letter, forming a rebuttal package.
Conclusion and request for reversal: Summarize your case again, reviewing key points that demonstrate the chargeback is unjustified.
Politely request that the chargeback be reversed based on the arguments and evidence in your rebuttal letter.
2. Representment
Submit the Representment Package
The official start of the representment process occurs when you submit your complete rebuttal package to the bank.
Ensure that it gets delivered and received before the stated deadline. Any late submissions result in losing the case.
Bank or Processor Reviews the Case
Upon submission of your rebuttal package to the acquiring bank, the bank reviews it for compliance with accepted disputation standards. If problems are found, you may be asked to further clarify or fix the problems. Any problems not fixed may result in the representment failing to proceed.
If the acquiring bank believes your case to be strong and compliant with the rules, it forwards the package to the cardholder’s issuing bank.
It is the issuing bank that makes the decision whether to uphold the chargeback or reverse it. The cardholder’s dispute is judged against your evidence.
This is the crucial stage of the representment.
Notification of the Outcome
You will be notified once the issuing bank’s decision has been made.
If your representment is successful, the chargeback will be reversed, and the funds returned to your account. Otherwise, the chargeback stands and you will lose the disputed amount, plus fees.
3. Post-representment
Pre-Arbitration
The final chance to overcome a chargeback before going to full arbitration is known as pre-arbitration. It is designed to give both parties a chance to present their final round of evidence before moving to the more expensive and formal arbitration level.
Arbitration
If the chargeback still stands against you after pre-arbitration, you have the option to escalate the dispute to arbitration by the card network (Visa, Mastercard, AMEX, etc.). There are additional fees associated with arbitration. You must weigh the decision carefully to see if it is worth the risk.
Final Decision
Ultimately, the arbitration process leads to a final decision. The outcome is binding. The losing party is responsible for the disputed amount plus arbitration fees.
The representment is concluded.
Avoiding Representment and Chargebacks
By leveraging automated chargeback prevention services, merchants can not only improve their chances of winning representment cases but also reduce the overall incidence of chargebacks.
Our service, ChargebackStop.com, can reduce your chargebacks by 99%. This avoids the representment process in almost all cases. Those invalid chargebacks you must face are defended against more easily by ChargebackStop’s support of the representment process.
Support includes:
Start taking control of chargebacks today.
Visit ChargebackStop.com for a free demo and to learn more about avoiding chargebacks and representments before they happen.
FAQ: Chargeback Representment
When should a merchant consider representment?
A merchant should consider representment if they believe a chargeback is unjustified and they have sufficient evidence to prove the transaction was valid.
What types of evidence are required for a successful representment?
The type of evidence required depends on the reason for the chargeback. Common types of evidence include signed delivery receipts, transaction records, customer communications, service agreements, and any documentation that proves the customer received the goods or services as described.
How long does the representment process take?
The duration of the representment process can vary, but it generally takes between 6 to 8 weeks from the time the merchant submits their evidence to the final decision.
What are the consequences of losing a representment case?
If a merchant loses a representment case, the chargeback stands, and the merchant loses the disputed funds. Repeated losses can impact the merchant's chargeback ratio, potentially leading to higher processing fees or even termination of processing services.
Is it possible to appeal a lost representment case?
Yes, if a merchant disagrees with the outcome of a representment case, they may have the option to escalate the dispute to arbitration through the card network. However, arbitration involves additional fees and a review by the network itself, which makes a final, binding decision.