Responding to chargebacks is important, but did you know that how merchants respond to chargebacks can drastically increase their chances of winning?
The “how” of their response largely depends on the reason code. Merchants should use this as a baseline of what relevant information to include in their response. The card brands each have their own reason codes that help classify chargebacks based on the reason they are initiated.
For example, a merchant would not respond to a reason code 13.1 Merchandise/services not received chargeback in the same way they would respond to a 10.4 Other Fraud, Card-Absent environment chargeback.
A response to a 13.1 chargeback should include proof that the merchant delivered the good or service.
For a 10.4 fraud chargeback, the cardholder is claiming they didn’t initiate the transaction and therefore the burden is on the merchant to prove that they attempted to confirm the buyer is who they said they were. If the merchant attempted CVV2 and AVS but the issuing bank does not participate, that evidence should be included. The same holds true if the merchant used 3DS but the issuing bank does not participate.
Reverse the response on these chargebacks and one thing is certain: the merchant will lose.
There are a variety of tools merchants can use to ensure their response contains all the necessary elements. They can also help merchants provide responses in a timely manner, since responding to chargebacks can be time-consuming.
As you’re assessing tools to use to assist with chargeback response, you’ll want to find one that:
✔️ Customizes the response based on the reason code.
✔️ Automatically pulls any relevant data from the transaction or the merchant’s company profile into the response.
✔️ Simplifies the chargeback response process as much as possible by removing any cumbersome or redundant steps.