How to Fight Chargebacks: Main Steps

Chargebacks are an unpleasant part of today’s online business. Fighting against chargebacks is an important part of a business strategy that can pay dividends if all the steps are done right. This article explores key steps to combat chargebacks, prevent fraud and restore revenue for the company.

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Should You Fight Chargebacks?

Many business owners mistakenly believe that fighting against chargebacks is a waste of time, effort, and money and is more trouble than it is worth. However, they are greatly mistaken.

If you want to protect your business, reduce costs, and take your company to the next level, then fighting against chargebacks is an important part of your job. Reading this article means you’ve already decided you should fight back, but you don’t know how yet. The following will describe the types of chargebacks and proven steps to combat them.

Which Chargebacks Can You Fight?

If you don’t know much about chargebacks, the information below will be helpful. The first thing I would like to say is that you can only fight against invalid chargebacks.

Unfortunately, sometimes it can be hard for sellers to fight against chargebacks resulting from criminal fraud or mistakes made by the online store. It is so because they don’t have enough tools and experience to do it well. The same thing is about disputes signed for no good reason or when customers want to leave an order and receive money back at the same time. Another name for such actions is friendly fraud.

It is not uncommon for a friendly fraud chargeback to be filed accidentally. This can happen when a customer wants a refund but does not understand the difference between a refund and a chargeback. On the other hand, such refunds can be filed on purpose. For example, the buyer knows they have no good reason to open a dispute but wants the item for free.

Unfortunately, identifying friendly fraudulent chargebacks is not an easy task. However, there are important questions to answer in order to prepare a valid chargeback defense:

• Is this transaction recorded in your logs?
• Does the chargeback reason code listed on the appeal match your records?
• Do you have proof that the item customer purchased arrived on time and in the condition shown on your website?

The more answers you have, and the more proof you have that the transaction was completed according to the rules, the more likely you can fight such chargeback back. After all, every illegal chargeback you don’t fight takes away from your money and time.

What’s more, it can worsen your company’s reputation as well as cause irreparable damage when dealing with banks and other financial institutions. Another disadvantage is that ignoring chargebacks will encourage dishonest buyers to abuse chargebacks in the future.

If you or your team don’t have time to deal with chargeback appeals, you can use chargeback management software that manages your chargebacks and collects user and disputed transaction data from multiple sources. The software monitors and reports accurate information about potential fraud and chargeback winning opportunities. In some cases, it also helps to resolve disputes automatically. In other words, chargeback management software offers protection and resolution services.

How to Fight Chargebacks: 4 Basic Steps to Win a Dispute

Once we’ve figured out what types of chargebacks you can and should fight and what a friendly fraud chargeback is, it’s important to understand exactly how to fight chargebacks.

Study the Terms

Learning the terms is probably the most important part of fighting chargebacks. The first thing to keep in mind is that there are legal deadlines within which you have to provide documentation and other evidence to dispute a chargeback.

Depending on the card network, as well as the reason code, you may have anywhere from 20 to 45 days to dispute a chargeback. Processing time by the acquirer is also included in this time frame. This can significantly shorten the amount of time you have to file a chargeback response.

Assemble Compelling Evidence

Collecting and providing quality evidence is another big part of the job of disputing chargebacks. You need to understand that banks decide whether or not to issue refunds based on the strength of your evidence. While the list of evidence may vary depending on the bank and the reason code, we have compiled a list of the most popular proof:

• A copy of the sales receipt.
• The tracking number of the package, as well as proof of delivery of the order.
• A copy of the return policy that is listed on your website.
• Product descriptions are provided on your website.
• Any correspondence with the customer, if any.

Draft a Rebuttal Letter

In addition to the list of evidence and documents we wrote about above, you should also provide a letter on behalf of the company, in which you describe the entire situation in detail and provide arguments that will help the financial institution make the right decision.

Submit Your Representment

Once all the necessary documents and evidence are ready and the letter is complete, you can send a dispute to your acquiring bank. The financial institution will review the records to ensure that everything required is present. After that, the bank will make an informed decision.

The Bottom Line

Chargebacks happen regularly in online sales. To protect your business, and save time and money, it’s important to avoid chargebacks and fight them. Some companies do this independently, spending substantial amounts, while others successfully use chargeback management software. This is a great way to control and prevent financial losses for your company.