How and When Should Merchants Respond to Chargebacks?

When is it worthwhile for the merchant to respond to a chargeback?
This is a tricky question, and to understand the right answer, it’s probably best for us to start with when it doesn’t make sense to respond to a chargeback.

Here’s the thing that many merchants don’t realize: there are fees that follow chargebacks through their life cycle.  It can also be time-consuming to respond to a chargeback.  So, a merchant should weigh the costs of these fees and the time it will take to respond.  If the transaction was for a small dollar amount, and it’s not typical for the merchant to receive chargebacks, it might not be worth the time and resources to fight it.

There are also chargebacks that simply cannot be won, and those are not worth fighting.  The most common scenario for this?  The response timeframe has already expired.  Another reason?  The merchant cannot produce sufficient evidence to win the chargeback.

However, if the dollar amount of the sale outweighs the resources needed to respond, and the merchant feels that they have a chance of winning, they should definitely respond.

Here are a few tips to increase the likelihood of winning:
✔️ Include a rebuttal letter that summarizes key pieces of evidence.  Stick to things that are relevant to the case.
✔️ Ensure the response includes compelling evidence given the chargeback claim (we covered this in detail yesterday)
✔️ Respond within the allowable timeframe.
✔️ Use chargeback response and automation tools.  Ask the Secure Bancard team to help identify the best products that match the merchant’s needs.