As an online merchant, you are vulnerable to fraud with every transaction. A common type of online fraud is chargeback fraud. In online transactions, merchants don’t have the ability to physically check the customer's credit card, identification or signature, making it easier for criminals to use stolen information to make online purchases. It’s also becoming easier for fraudsters to commit ‘friendly fraud’ and claim they never received a product they ordered when, in fact, they did. This is a growing problem, and one you’ll need to be aware of as an online merchant. Luckily, card networks give online merchants a chance to fight chargebacks, recover lost revenue and expose fraudulent consumer behavior.
It would be too time consuming to fight each and every chargeback, but it is important to carefully analyze each chargeback claim and fight the ones that are worth your time and energy. If you never fight, you’ll always lose profit, and when the stakes are high, it's worth investing your time and trying to win.
Fighting a chargeback is called, 'representment.' When a merchant processes a credit card transaction, the bank is presented with a sale. If the cardholder issues a chargeback, the merchant can dispute it and ask for the transaction to be submitted to the bank a second time – this is called 'representment.' The merchant can ask the bank to cancel the chargeback and charge the cardholder again. Chargeback representment seems like a straightforward process and an effective way to combat chargebacks, but having success with this process isn't that easy.
To fight a chargeback dispute, you need to have a clear understanding of the process, and the strict deadlines and documentation requirements. You also need compelling evidence, which includes all relevant records about the case, as well as a rebuttal letter. If you have this information, you can approach your fight with confidence. If you don’t, you may want to seek outside help. Consider hiring a third-party professional who specializes in this type of work.