Simply put, a representment is the process of responding to a chargeback that may result in the recapture of funds originally lost to a chargeback. A representment is the merchant’s opportunity to provide documentation and additional information to prove that a transaction is a valid and legitimate transaction the customer willingly engaged in and received merchandise and/or services for.

The best reason for your business to be processing representments is the ability to recapture those funds and increase your bottom line.  It’s important for merchants to fight chargebacks as invalid disputes are costly to all parties involved – the issuing bank, the card association, the acquiring bank – and the merchant.

Additionally, if a merchant chooses to accept chargebacks as a cost of doing business, they may inadvertently be putting a target on their back. The merchant may become known as an easy win to issuing banks and merchants may see increased chargebacks due to this. Reputation is important and fighting chargebacks shows that you will not stand for chargeback fraud. Not fighting chargebacks essentially tells the bank the customer’s assertions are true.

Are there any drawbacks to representments?

Cost

• If the billed amount of the transaction is low, you may want to just accept the chargeback and move on as the fees associated with both the chargeback and the representment may outweigh what you would recoup
• The chargeback process does not end at a representment.  If an issuing bank declines to accept your representment request, the next stage is arbitration. Arbitration can be costly, up to $500. The card association reviews the case and assigns liability. The liable party pays the arbitration fees. A good relationship is necessary with your acquiring bank/payment processor to ensure cases are only filed when agreed upon

Resources

• Fighting chargebacks takes a lot of resources. If you do not have an in-house team that can stay up to date with card association rule changes, changes at your payment processor, automation of document creation and response at your payment processor then fighting chargebacks can be a daunting and time-consuming task

Time

• Fighting chargebacks is time consuming. Time to review the dispute, time to prepare the representment documentation and lots of time waiting. In general, a consumer may initiate a dispute within 120 days of the billed transaction. Once the chargeback has been received by the merchant, they typically have between 14-30 days to submit a representment or accept the chargeback. Once a representment has been processed by the acquiring bank, the issuing bank typically has 30 days to respond

Not all chargebacks are created equal

• If the dispute is valid, accept the chargeback. You can do more harm than good by supplying incorrect information.

How can I be more successful with representment processing?

A successful representment starts with a quality rebuttal letter incorporating all available data points and compelling evidence that demonstrates the transaction is valid. The required elements of the rebuttal letter will vary a bit as there are different types of merchants and transaction types (brick and mortar card present transactions, single purchase card not present internet transactions and regularly recurring card not present transactions just to name a few). In order to put the right letter together, you will need to have access to the following information:

• Merchants billing descriptor/business name and description of the merchandise or service purchased
• Customer billing/shipping address, phone number, email address
• Any communications that took place with the customer – text, email, USPS mail tracking
• ARN (Acquirer’s reference number) assigned to the sale
• Association transaction ID
• AVS (Address Verification Service) response if a card not present transaction
• CVV (Card Verification Value) response if a card not present transaction
• Authorization code
• Transaction history if a repeat customer
• Terms and conditions if relevant to the sale
• For e-commerce transactions, IP address, device ID number
• Any other evidence that may prove the customer is in possession of the merchandise/using the service
• Proof of delivery response if a card not present transaction/merchandise was shipped
• If a refund was performed, why? Was there communication with the customer that prompted this?  Include all information available
• For matching purposes at the issuing bank, provide all transaction details assigned to the refund as well (ARN, authorization code, processing date etc.)

Aside from including the technical details of the sale, the best rebuttal letter is tailored to the nature of chargeback reason code – i.e., fraud, cancelled a recurring transaction, goods or services not received.

Additionally, consumer claims outlined in the accompanying chargeback documentation should be addressed directly whenever possible. All information should be packaged in a logical way that tells the story of the transaction from the authorization to the sale and delivery of merchandise/services and ending with the nature of the received dispute information.