Staying compliant is big business. Once dropped by their Processor, Merchants can find getting a new one difficult and expensive. And Processors and Payment Enablers need their Merchants to stay healthy and profitable for longer, because that’s where their own revenue comes from. 

Sometimes a Processor might require their Merchant to use a third-party chargeback service or a representment builder tool. This is particularly commonplace when Merchants start to slip out of compliance. There’s no denying it, these mitigation options make managing representments quite a bit easier than doing it by hand. But like anything, there are pros and cons.

1. Third-party Representment services can be an easy fix for Processors, but also a costly one. Processors might also have relationships with different third-party services, allowing integration with Merchants’ payment data and a deeper insight into the Processor’s representment requirements. They can help merchants better comply with unique industry/business risks, manage chargebacks and give an ease of mind knowing that chargebacks will be fought.

   There are a few important things to take note of though. Third-party services won’t always have access to the Merchant’s unique billing, delivery or business situations, which can lead to lower chargeback win rates. Secondly, these services aren’t transparent. A technically experienced team can find insight about chargeback causes and win rates from representment data. Lastly, these services have a business model that relies on fighting as many chargebacks as possible—don’t expect them to tell you the root cause of growing issues, because decreasing chargeback volume is decreasing their revenue. And their share of revenue adds up quickly. 

2. Representment Builders all vary a bit, but they tend to offer similar representment functions. These tools are straight forward. The Merchant fills out the representment fields, generates/writes a rebuttal based on form answers, then attaches relevant information. In terms of fighting chargebacks, Merchants can save more time with a mitigation tool than writing every rebuttal out by hand. A Merchant can also gain more transparency around what’s being argued, how it’s being argued and what evidence is being presented.

   For the Merchant, these representment tools can be a life saver. But one big issue arises—Merchants aren’t always as technically experienced with Payments. Priorities can be focused on growing a business, selling more product, providing excellent customer service, and less about building a strong case against chargebacks and drilling into the root causes. Though faster than creating a representment from scratch, Merchants might still need to spend time filling out fields and hunting down supporting evidence. And they might also not achieve optimized win rates. And there’s the cost issue, future eroding the Merchant’s revenue.