How merchants win chargeback disputes (2024)

FAQs

How merchants win chargeback disputes? ›

Compelling evidence: If you have strong compelling evidence that shows the customer's dispute is unwarranted, then you have a good chance of winning the chargeback dispute and keeping the sales revenue (because the consumer won't receive the chargeback refund).

What are the chances of winning a chargeback? The average merchant wins roughly 45% of the chargebacks they challenge through representment. However, when we look at net recovery rate, we see that the average merchant only wins 1 in every 8 chargebacks issued against them.

Chargeback Win Rate

On average, merchants win approximately 32 out of every 100 chargebacks they decide to contest. This means that if you're a merchant dealing with 100 chargebacks, you can typically expect to successfully recover funds from around 32 of those disputes.

You might not always get a fair outcome when you dispute a chargeback, but you can increase your chances of winning by providing the right documents. Per our experience, if you do everything right, you can expect a 65% to 75% success rate.

An effective representment strategy typically results in a win rate between 65% and 75%, but some merchants would feel lucky to reach even half that. To help out, let's go over four basic tips merchants can use to get more chargeback reversals.

The issuer will make a decision, although a second chargeback is also possible. Finally, an appeal for arbitration can be made to the card network, whose decision is final.

Losing the chargeback means not only losing the sales revenue, but also the associated chargeback fees merchants typically must pay to cover the cost of the chargeback process.

The first thing that you can do to win a chargeback dispute as a seller is to maintain accurate records and gather compelling evidence about the transactions that you have processed on your platform. Disputes are usually much less favorable for merchants than they are for customers.

Do banks really investigate chargebacks? ›

In an effort to provide better customer service, banks will typically resolve conflicts fast. The bank launches an investigation into payment fraud by requesting transaction details from the cardholder. They examine crucial information, such as whether the transaction was card-present or card-not-present.

When a cardholder disputes a transaction, the bank initiates a chargeback and contacts the merchant providing a reason code for the dispute. The merchant then has the option to either accept the dispute and the associated losses or fight the chargeback by providing evidence that the transaction was valid.

Bill or invoice. Communication with the customer (if available). Signed receipts. Proof of guest acknowledging the terms and conditions (T&Cs) of the property.

In chargeback cases, the burden of proof falls on the merchant. In order to win back their lost revenue, the merchant must prove that their charge was authorized, and that the goods or services were delivered.

Yes, merchants can take cardholders to court for chargebacks, particularly if they believe the chargeback was fraudulent or unjustified. To do this, the merchant would file a lawsuit in small claims court, seeking to recover the funds that were charged back, plus any additional damages or costs incurred.

Companies despise them for several reasons. They not only result in lost revenue but also involve additional fees, consume valuable time, and can damage the reputation of a business. Moreover, high chargeback ratios can lead to higher processing fees or even the termination of the ability to accept credit cards.

A denied dispute means the funds go back to the merchant, and the seller has no obligation to refund you or make things right. Left unpaid, disputed amounts can damage your credit score if you fail to pay on time. In this article, we'll explore what happens when your credit card issuer rejects your dispute.

Win rate is a commonly referenced key performance indicator (KPI) for chargeback management. In-house teams with manual processes usually achieve a 20-40% win rate. Midigator's technology has an average win rate of 65-80%.

Fighting customer chargebacks can be a costly, time-consuming headache for merchants. Unfortunately, there's no way to prevent all chargebacks—but with thorough records, a convincing rebuttal letter, and compelling evidence, merchants can fight chargebacks and win.

Jessica Velasco | Friday, February 16th, 2024 | 14 minutes. Chargeback win rate is a calculation that compares the number of successful chargeback responses to the number of cases fought.

Can a merchant win a chargeback dispute? ›

The first thing that you can do to win a chargeback dispute as a seller is to maintain accurate records and gather compelling evidence about the transactions that you have processed on your platform. Disputes are usually much less favorable for merchants than they are for customers.