Tom-Chris Emewulu
Chief Disputes Analyst

The first step in a chargeback mitigation process is usually the chargeback response stage.

It's a merchant's opportunity to establish that a particular forced deduction is unjustified and meritless. And by industry standards, you actualize that goal using a chargeback response letter.

At phase value, it looks like an easy-peasy endeavor. You write to the issuer, explain your side of things and be done with it. Right?

Well, that's not quite how things play out in practice. Writing a chargeback response is often a time-consuming and labor-intensive activity. It requires tact and experience.

If you are new to the game or still trying to get a hang of things, don't panic. We've got your back. With the hacks and actionable tools we constantly bring your way, you will boss your way around any chargeback dispute without breaking a sweat.

That said, we must start off by highlighting that an effective chargeback response letter is usually concise and speaks to the issue at hand. Every word, every image should have a purpose. And anything that does not advance your goal of overturning the chargeback you must edit out.

You must also structure your chargeback response in a way that a busy bank agent can understand your position and rule in your favor. And to do that without shooting yourself in the foot, below are exclusive insights on chargeback response best practices that secure the bag.

What is a Chargeback Response?

A merchant's response to a chargeback notice from the issuer is known as a chargeback response. And per standard procedures, every merchant has the right to respond and challenge the customer's claims. If a chargeback is meritless, it shouldn't have happened in the first place. So the chargeback response helps you to counter the dispute and get back your money.

Put another way, a chargeback is how the cardholder interpretes the situation, and a chargeback response is your side of the story.

You can overturn the chargeback and reclaim lost revenue if your chargeback response has a compelling argument with crucial evidence that contradicts the cardholder's claim.

What Should Your Chargeback Response Contain?

Invalid disputes are probably relatively easy to spot from your side of the table. And it may seem obvious the powers that be should easily overturn such disputes. But it may not be as evident from the issuer's perspective. And requesting that a bank take money from a cardholder is a big deal — especially if it's a large sum of money!

To be successful, you must present the most compelling and convincing argument possible. You'll need a well-considered statement, a polished presentation, and, most importantly, rock-solid evidence to back up your claim.

Basically, your chargeback response should have details about transaction and chargeback information. These are the merchant account ID, transaction ID, chargeback amount, and other relevant information about the case addressed in your cover letter.

What is Compelling Evidence?

Documents that you include in your response to prove that a transaction is valid or, in other words, contradicts the chargeback are known as compelling evidence. Ideally, the chargeback reason code will determine the type of evidence you share. Some crucial examples of specific documents used as compelling evidence are as follows:

  • Delivery confirmation of the order
  • Conversations with the customer
  • Verification codes (AVS, Authorization, Card Security Code, 3D Secure 2.0)
  • Digital usage logs
  • Contracts

How to Write a Potent Chargeback Response

Although each case necessitates a response letter tailored to the specific chargeback at hand, all chargeback response letters should be one page in length. And as we intimated earlier, you must try to keep the chargeback response straight to the point, with bullet points, short sentences, and persuasive, active verbs.

Again, cut to the chase — try to keep it simple, don't forget to show proof of service or product delivery. Include terms of service and refund policy, and don't forget to show proof of authorization.

Some Do's and Don'ts to keep in mind

Your time and money are precious assets. Don't waste time on unwinnable disputes. Consider these Do's and Dont's as they apply to your chargeback response letter.

The crucial items you must include in your chargeback response

Some crucial documentation to include in your chargeback response for the best results are as follows:

First, Terms and Conditions

Make it clear that the customer knew what the rules and expectations are from the very beginning.

Selectively include relevant information on the transaction, such as return or cancellation policies, refund information, and purchase agreements as shown to the customer.

Second, Delivery or Service Proof

You made a sale to the customer. You must now demonstrate that you delivered the item as promised. Share proof of service or delivery in this section.

The type of proof you include here will be determined by the product you sold.

Third, Your Cover Letter

Craft your chargeback response cover letter and provide an overview of the critical relevant information about the case.

Below is an example of a chargeback response cover letter. Feel free to adapt it to your purpose.

Business Name: Joe Shop
MID: 987-654321
Chargeback Case Number: 12345678
ARN: 99118822
To whom it may concern:
Joe Shop sells unique and one-of-a-kind clothing for men. At our website, joeshoe.com, customers can browse products at various price points. Order amounts vary depending on the merchandise and the delivery method that was chosen.
Our 100% Satisfaction Guarantee means we stand behind our products and customer experience. Customers can contact us for any reason, and we’ll refund or replace orders as desired. We are willing to do what it takes to ensure complete satisfaction. Despite our customer-centric policies, cardholder Phillip Latham decided to initiate a chargeback.
On November 2, 2020, Phillip purchased a T-shirt from our store, and his card was charged $45.09. Two months later, on May 5, 2021, Mr. Latham disputed the purchase, claiming the merchandise wasn’t received.
We are disputing this claim and request that the chargeback be reversed.
Because case number 12345678 was categorized as reason code 13.1 Merchandise/Services Not Received, we are providing the attached compelling evidence. The following is an overview of what those documents contain:
  • Before completing the purchase, Phillip Latham agreed to our terms and conditions, stating that customers can return merchandise if they are dissatisfied.
  • This transaction received a positive AVS match code.
  • The billing address and shipping address match.
  • FedEx tracking information confirms the item was delivered on March 9, 2021, to the address Philip provided.
  • On March 11, Philip completed a product review on our website, giving the purchased item five stars.
The attached evidence proves the claims made in the dispute lack authenticity. Moreover, as our policies clearly state, Joe Shop would have been happy to directly resolve any issues with Philip. However, Mr. Philip did not give us the opportunity. For these reasons, we request the disputed funds be reversed.
Thank you for taking the time to review this case.
Sincerely,
Joe Shop customer service team
joeshop.com 301-701-1234
460 Russell Street, Lawrence, MA

Fourth, Transaction Details

Emphasize important transaction details such as sales receipt, invoice.

Include evidence that supports your case, such as positive AVS, card security code, and 3D Secure responses.

Fifth, Order Information

Share information obtained during checkout from the cardholder.

The information provided here should be specific to the chargeback. If the customer purchased digital goods, for example, shipping information is irrelevant. Rather, include computer logs and time stamp to show they accessed the goods after purchase.

Six, Order history or Customer Service Notes

Describe how you tried to work with the customer to identify and resolve the issue.

You could also add the following items in this section: Screenshots of chat conversations, email conversations, phone call transcripts, and order history screenshots are all available.

Seven, Images from the website

Provide a visual representation of the overall interaction with the product or service.

Take notes on the most crucial steps in the customer journey. You might want to include the following items:

  • The item's page
  • The payment page
  • Information on billing and shipping
  • The confirmation page for your order

We hope you find these tips and insights useful in mitigating chargebacks. If you wish to go a step further by leveraging AI & ML enabled framework, learn how Chargeflow can help you below.

Average Dispute Amount
Average Dispute Amount
$
30
# Disputes Per Month
# Disputes Per Month
#
50
Time Spent Per Dispute
Time Spent Per Dispute
M
20
calculation
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$500,000 and save
1,000 hours every month with Chargeflow!
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