What Type of Merchants Need Chargeback Representment?

Chargebacks cost merchants billions of dollars every year. Chargeback representment is their opportunity to defend their reputation and protect themselves from costly losses.

So how do you know if you need chargeback representment? There are two industry types for which chargeback representment typically applies.

Product-Oriented Businesses

Businesses that deliver physical goods to customers as the foundation of their business model are product-oriented. There are many reasons why chargebacks are issued for product-oriented businesses:

  • The customer claims they never received their goods. In this case, evidence like tracking numbers and delivery confirmation forms can help your case for representment.
  • The customer claims they never received a refund for returned merchandise. Demonstrating that the refund was issued or clarifying any technicalities in your refund process will help you defend against this type of chargeback.
  • The customer says he or she is dissatisfied with the quality of goods they purchased. If you can prove that your product was delivered as described, or that the customer has received similar quality goods in the past without any complaints, you will improve your odds of receiving a chargeback reversal.

These are just a few examples of the types of chargebacks product-oriented businesses typically face. By ensuring you have strong processes when it comes to invoices, receipts and quality control for your products, you’ll increase your odds of having the right evidence to fight chargebacks, as well as minimize the amount of chargebacks you receive.

Service-Oriented Businesses

Service-oriented businesses do not provide physical goods to customers. Rather, they provide quality services to clients. Some examples of chargebacks for service providers include:

  • The customer is disputing a payment transaction made to their card. In this instance, you may simply need to provide clarity as to why the charge was made for your services. Outlining any charges ahead of time can help prevent these types of chargebacks.
  • A customer disputes they requested your services. If this is the case, be sure you can provide a signed contract or invoice outlining the services that were charged for.
  • The customer is dissatisfied with the level of service provided. Again, demonstrating a history of customer satisfaction for previous services rendered can be key to winning a chargeback reversal.

Disproving chargebacks for services can prove more difficult since service quality is a subjective measurement. Having documentation that thoroughly outlines your services ahead of time can help you prevent any future issues.

The Issue of Fraud

Fraud is something that affects everyone – customers, product-oriented companies and service providers alike.

If you feel that a cardholder has filed a chargeback for the wrong reasons, the chargeback representment process can protect you. For instance, if a customer has buyer’s remorse and they don’t want to go through a burdensome return process, this does not give them a legitimate case for filing a chargeback.

It’s up to all merchants to look into each chargeback filed and dispute the ones they have the evidence to win in order to protect their finances and their reputations.