July 31st, 2018An important piece of the chargeback puzzle
Losing the fight against chargebacks can be detrimental to a merchant’s business. Dispute responses need to be managed efficiently by keeping up-to-date chargeback management principals and following industry best practice. Chargebacks cost merchants and issuers more than USD$31 billion in 2017, and this figure is only set to rise. Rebuttal letters are one of the few lines of defense merchants have to fight a chargeback, but they are often rushed to gather and include the necessary elements to support a convincing rebuttal.
Why is a rebuttal letter an important tool?
In order to successfully fight a dispute and win, merchants must collect compelling evidence that the transaction being disputed is, in fact, real and not fraud. Once collected, the merchant must submit this to the Issuer in the rebuttal letter. The rebuttal letter is the document that can sway an arbitration ruling in the merchants favour, saving them money. Now, with the introduction of the Visa Claims Resolution, merchants now have even less time to resolve a dispute. In some cases, merchants may only have up to 20 days to gather evidence, create their case, and present it in a rebuttal letter.
How do you build a strong rebuttal letter?
Rebuttal letters need to present compelling evidence to issuers through a clear and succinct argument. There must be no doubt that the cardholder authorized the purchase and received the delivery. As merchants do not have long to pull together this information, using a solution that monitors purchase data, tracks payment and delivery details, and allows direct insight into order history can provide merchants the timely and detailed data they need to write the chargeback rebuttal letter. Merchants should look to include the following in their rebuttal letter:
- Copy of the refund/return policy
- Proof of cardholder approval for the purchase
- Confirmation emails/transcripts with the cardholder to prove the purchase
- A clear copy of the sales receipt, invoice or order form
- Delivery details, including the tracking number, signature upon receipt, and delivery time/location
- Proof that the customer lives or works at the delivery address
- Photos, descriptions, etc. that can prove the purchase matches the description provided
- Indications that previous transactions from the same IP address, email address, physical address or telephone number were undisputed
- Evidence of the customer’s IP address and the download time and date (if a digital service)
- Proof that someone related to the customer could have made the purchase with the customer’s card
Avoiding chargebacks
Chargebacks are a costly result of doing business. By putting effective chargeback management solutions in place, merchants can reduce losses. Merchants who focus on catching fraud during the payment cycle often forget about fraud that can occur after the transaction is complete. Professional fraudsters who find merchants with slack fraud protection will take advantage, and fraudulent chargebacks can escalate at a huge rate.
Understanding your entire business model and payments system will help you build a chargeback solution suited to your needs. Utilizing third-party protection systems, like Verifi’s patented CDRN® closed-loop network to catch and quickly resolve fraudulent chargebacks, can protect merchants.
