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Payments 101 - What's Required for Chargeback Recovery?

Chargebacks are usually received by merchants with a great sigh. They are an inevitable nuisance, taking up time, resources, money and patience.

Nevertheless, they are part and parcel of the world of ecommerce; fortunately, there are many ways to combat them. Here’s how to win more disputes, recover revenue and reduce your overall chargebacks:

Lay out the facts

First thing to do when looking to recover revenue lost to chargebacks is to establish the facts. What caused the dispute? Is it possible to fight back? The point is, if merchants can nail down the specific reason in enough time, it can open up a wider array of opportunities to deal with the situation.

Option one is to try and stop the chargeback process in its tracks. For example, if a customer calls the issuer to start a chargeback, and then a few days later the merchant resolves the issue or offers a refund, the customer can revoke their claim with a simple call to the issuer. Not doing so, can result in negative impacts on credit for the customer. 

For merchants, this can mean they must issue a refund, but this is still preferable to the lengthy and expensive process entailed in dealing with chargebacks.

One way to find out why a chargeback was filed is to take a look at the reason code. Each card scheme has a system of codes which consumers need to fill in to explain the cause of the dispute. Examples of common Mastercard reason codes like, 4853 which is a cardholder dispute, or 4999 which is a domestic dispute used widely across Europe.  

These are a valuable guide for merchants and can help with chargeback recovery in many cases, though it’s important to remember that some customers may not be as truthful as others. Friendly fraudsters can lie to their issuers which might change the reason code and thus the burden of proof to fight the transaction dispute. 

So, what’s the process when you suspect friendly fraud? Representment is the key.

Represent your case

Chargeback representment is the merchant’s moment in the spotlight; your chance to dispute a chargeback and retrieve funds that are rightfully yours.

To do this, the merchant must provide multiple pieces of compelling evidence to prove the transaction was valid. Examples of specific evidence you can provide include:

  • A confirmation of delivery receipt
  • The customer’s signature upon delivery
  • Communication between you and customer regarding the transaction
  • Any digital information such as the customer’s IP address and download time (if the product is digital)
  • Proof that the customer lives or works at the delivery address
  • Any transaction history you have with the customer 

The more information you have, the more powerful your case becomes.

How to win your chargeback dispute

  • Tools 
  • Etc. 

Contact Ethoca to learn more about our innovative solution, Ethoca Eliminator, to help mitigate chargebacks. 

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