Here's How to Write the Most Potent Chargeback Response

Composing the most effective chargeback response is the primal pre-condition of a successful chargeback dispute. It’s the necessary and sufficient documentation for reclaiming a disputed sale and avoiding unnecessary punishment from regulators. It saves your business’ bottom line from taking underserved hits.

Crafting a chargeback response is a challenging task. But you already know that. The chargeback representment process is extremely complex. It requires specialized knowledge, and the rules are inconsistent across the card networks. That makes it incredibly difficult for the average merchant to write the kind of chargeback response that wins cases.

But that’s not the complete story. What if I told you there are unspoken rules and best practices you can apply to bypass the huddle and win false chargebacks? That's right. Writing a chargeback response doesn’t have to be such an absolutely dreadful task.

Continue reading to discover the specialized, actionable insights and best practices.

Chargeback Response: What is It in Simple Terms?

A chargeback response is a high-intent documentation that a merchant provides to counter a cardholder’s claim and reverse a chargeback. It contains your rebuttal letter, compelling evidence, and other supporting documentation (skip to the subsequent passage for more details).

Just as The Fair Credit Billing Act (FCBA) Act 1974 empowers cardholders to dispute transactions they did not authorize, the law equally allows merchants to contest false chargebacks. In that sense, a chargeback response is how you, the merchant, see the case – and ancillary documents you’ve provided to establish your claim.

It’s such a critical aspect of recovering a sale that you’d ordinarily lose to a fraudulent chargeback. Hence, it pays to understand the tools that can enhance your chances of success.

Vital Components of a Chargeback Response

Recall that a chargeback response is not just one document. It’s a collection of documents, or better expressed as tools, that answer to the demands of the chargeback stakeholders. Therefore, a potent chargeback response must contain the following vital tools to maximize your chances of overturning the dispute:

#1 A Rebuttal Letter

A chargeback rebuttal letter is a formal letter with a succinct overview of the transaction and the reason for disputing the chargeback.  It's also known as a chargeback response letter, chargeback dispute letter, or chargeback representment letter.

Think of a rebuttal letter as your “cover letter” for disputing a chargeback. It outlines the transaction details, references the reason code provided by the card issuer, provides your reason for challenging the case, and highlights your evidence.

Note! A chargeback response letter is synonymous with a chargeback response. It’s only one component of the entire chargeback response. It acts as a cover letter in a job application for your chargeback response. It's your elevator pitch of some sort. In other words, while a chargeback rebuttal letter is one vital document in your dispute package, it’s only one tool among several others.

#2 Compelling Evidence

A chargeback compelling evidence is documentation that fortifies your claim that the chargeback is meritless and the reversal meritless. Chargeback compelling evidence aims to contradict the customer’s statement. Therefore, any piece of information you add as part of your chargeback evidence must be in line with the chargeback reason code obtained from the bank.

Again, a chargeback compelling evidence serves the crucial purpose of reversing the chargeback and establishing the sale. The following are some examples of documentation that make compelling evidence:

• Evidence of transaction validity. This could represented by:
  1. A copy of the transaction receipt or invoice.
  2. Customer authorization is received through terms acceptance, a signed receipt, or a digital signature.
  3. Positive AVS and CVV or 3DS verification results

• Proof of transaction delivery or order fulfillment, such as:
  1. For digital goods: Include tracking code (numbers) and usage or access logs will suffice.
  2. For physical goods: Include order delivery confirmation and tracking numbers.

• Relevant customer communications like emails, messages, or chat logs indicating the shopper acknowledged the transaction or delivery.

Relevant customer communications can also include screenshot evidence that you tried to resolve the issue directly with the customer.

#3 Company Policies

Including your policies helps you establish the terms the customer agreed to during the transaction. Guidelines like refund policies, return policies, or order cancellation rules are standard assets to include. They demonstrate the customer's acknowledgment and your compliance with these terms. They provide contextual details highlighting your crediting and refuting claims like lack of authorization or expectation gaps.

But for such tools to be effective, you must:

• Indicate the exact policy applicable to the dispute, and
• Show how and where the shopper agreed to or acknowledged the policy. This can be a screenshot of your checkout page, a signed document, or an order confirmation email.

#4 Other Relevant Information

After adding the most essential documentation listed above, it’s equally advisable to include a visual representation of the customer’s overall interaction with the product or service. Why? Chargeback dispute is a legal battle. Any information that can help you win the dispute must be included.

Take notes on the most essential touchpoints in the customer journey. You might want to include the following aspects of the journey as screenshots:

• Your landing page.
• The payment page.
• The order checkout and confirmation page.
• Shipping timeline provided if you sold a physical product.

How to Write a Potent Chargeback Response Letter

Every merchant will tell you that false chargebacks are the worst. There’s nothing fun about a cardholder forcing transaction reversal for some confabulated reason. Unfortunately, it happens. It happens a lot!

And so, you might be tempted to vent your frustrations in your chargeback response letter. You might even want to c*rse someone out to show them how unfair the meritless reversal is.

Don’t do it. Your chargeback response must be succinct, professionally written, and comprehensible. Ideally, it should be one page in length. And, as best practice, use clear sentences and persuasive, active verbs. Highlight essential details with bullet points (see a free template below).

Here is a checklist of a standard chargeback response letter:

1. Cover letter with the dispute summary and why the cardholder’s case lacks merit.
2. Chargeback reason code obtained from the bank or card issuer.
3. Compelling evidence, as highlighted above.
4. Company policies and service terms.
5. Relevant transaction and website images.

Structure your letter professionally. Cut to the chase – keep it simple for busy professionals. The template serves as an example in crafting your copy.

Chargeback Response Letter Template

[Your Company Logo]

[Address]

[City, State, ZIP Code]

[Company Email Address]

[Phone Number]

[Date]

‍

To:

[Financial Institution or Payment Processor's Name]

[Dispute Department Address]

[City, State, ZIP Code]

‍

Dear [Addressee’s Name if known],

Subject Line: Response to Chargeback Case ID: [Add Case ID]

I write to formally challenge the chargeback [insert case ID] filed by [Cardholder's Name] under the code [include reason code] in the amount of [$$$ value]. The disputed transaction is a valid order of [merchandise or Service Name] from our eCommerce website on [Transaction Date], with the invoice number [inset order/invoice number].

Hence, we believe the chargeback has no merit and have attached the following evidence to prove that:

• Attached file 1
• Attached file 2
• Attached file 3

Based on the attached evidence, I kindly request that the funds be reinstated into our account at your earliest convenience. Please let me know if you require further information or clarification.

Regards,

[Your Full Name]

[Designation]

[Email or Phone Number]

Do's and Don'ts of Chargeback Response

Your time and money are precious assets. Don't waste time on unwinnable disputes. Also, don’t let your chargeback response be the reason you can’t win cases. Consider these do's and dont's as they apply to your chargeback response:

You can generate a cookie-cutter chargeback response with ChatGPT and other AI tools, that’s absolutely incomparable to what you get from specialized software like Chargeflow. Think about it. Wouldn't you want to fight chargeback fraud with a system designed specifically for that very purpose?

Why Struggle When You Can Respond to Chargebacks on Autopilot?

Chargeback response might seem effortless. But if that were accurate, merchants' chargeback win rate would not remain at ~12%, will it? Fuzzy rules and inconsistent terminologies, among others, make the process extremely cumbersome.

Yet, Chargeflow's automated chargeback prevention and recovery solution is helping merchants even the scale. The platform uses AI and machine learning to automate workflows, providing insights into chargeback reason codes and disputing chargebacks on autopilot.

Chargeback Response Automation in 5 Steps:

Chargeflow automates the response process by generating tailored dispute responses based on the chargeback reason code and extended order insights. This response creation is facilitated by a proprietary framework called ChargeResponse: Here’s how it works:

• 🧲 It links the dispute to its corresponding order data from the merchant’s eCommerce platform.
• 🔬 It understands the company’s background and the chargeback reason after analyzing the company's expertise and the dispute reason.
• 🌐 It uses 50+ data points, data enrichment systems, and several other aggregates to cross-reference relevant data.
• 📋 It analyzes the merchant’s policies and terms and provides the right sections that support the compelling evidence and improve its winning chances.
• 📝 Most importantly, the unique and powerful Machine Learning Algorithm keeps learning from your processes to maximize outcomes.

If you wish to take this powerful framework for a spin, we have an exclusive, time-sensitive offer for you this season. Get $10,000 in free chargeback management with our Black Friday, Cyber Monday, and Holiday bonuses.

Chargeflow in Action: A CROSSNET Testimonial by Co-Founder Chris Meade (via LinkedIn):

"Chargebacks suck. Responding to each case takes 30 minutes to an hour, and last year, we LOST upwards of $50,000 in frustrating chargeback cases.

We're now automating our chargeback management with Chargeflow, and our win rate has shot up by 300%! They do all the work. And you only pay them when a chargeback is recovered." – Chris Meade, Co-Founder of CROSSNET.

Chargeflow in Action: A Case Study of Marnetic:

Marnetic.com is a leading eCommerce platform offering high-quality, Budget-friendly products. The company faced an unexpected spike in chargebacks in August, dangerously reaching the 1% threshold.

Marnet knows that breaching this threshold leads to frozen funds or even account closures from payment processors like Stripe. They needed to remedy the situation quickly.

Hence, Marnetic implemented Chargeflow Alerts in August, a tool designed to preemptively detect and prevent chargebacks before they escalate.

Since deploying Chargeflow, Marnetic has reduced its dispute rate to a remarkable 0.13%, an 85.39% reduction in dispute rate!

This safeguarded their business from Stripe account freezes. It also removed them from Visa’s fraud monitoring program, ensuring smooth operations and protecting their revenue.

Today, Marnetic is maintaining a healthy chargeback rate. The company is supporting its growth ambitions with the confidence that Chargeflow’s AI-driven alerts prevent disputes from becoming costly obstacles.

Now, it’s your turn! Get $10,000 in free chargeback management with our Black Friday, Cyber Monday, and Holiday bonuses.