Fighting chargebacks – also known as chargeback representment – can be a daunting process, but one that can’t be ignored. Chargebacks left unchallenged can cost your business money, damage its reputation, make it harder to maintain good relationships with banks and open the door to more cardholders thinking they can abuse chargebacks.
To get a handle on the chargeback management process, it’s important to have a strategy that’s not just built on avoidance. Because no matter how good your mitigation efforts are, chargebacks are inevitable, especially as many people have learned to use chargebacks as a way to commit fraud and theft against businesses.
The right strategy hinges on preparation and follow-up that takes into account the following recommendations:1
- Be proactive. Monitor your customer and purchase activity to get insight into purchase patterns and areas of risk.
- Prioritize which chargebacks to fight. Based on Return on Investment (ROI) and the likelihood of winning the case, identify those most worthy of being represented.
- Understand that speed matters. The more quickly you can respond to a dispute, the better.
- Communicate with your acquirer. Be in touch before building your case as the acquirer may already be pushing back on the chargeback, and during the representment process.
- Know the facts. The compelling evidence that your business gathers to be sent in the chargeback rebuttal letter must be complete, accurate and easy to access.
- Study the reason codes. These codes provide all the details on the chargebacks and requirements for responding.
- Gather and analyze your chargeback data. Use the data to gain insight into the root causes of the chargebacks to identify operational issues and improve your internal processes.
In addition, it’s important to be aware of and refer to the documentation provided by the card brands. All have detailed rules and regulations regarding chargeback best practices – and with a solid plan in place, fighting chargebacks can be worth the effort.
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