Representment is a real word, despite what your spellcheck might think. You may not recognize the term, but if you’re a merchant, you’ve definitely been in a position where representment can help you out big time. Representment is the formal process by which merchants can dispute a chargeback, and if successful, recover the revenue at stake.

When the merchant submits a transaction to receive the funds from the bank, this is called “presentment.” Chargebacks reverse the presentment process. Hence “representment” gets its name as the act of re-submitting a presentment that was reversed by a disputed transaction.

On average, merchants dispute just over half of all chargebacks that stem from fraud. Some merchants turn to representment for every chargeback, others never challenge them at all. However, merchants should not fight chargebacks on a blind a yes/or no policy. The circumstances of each chargeback will determine if representment is warranted.

The whole process is set in motion when a cardholder requests a refund from their issuing bank. Right away, that bank will say yes, then issue a provisional refund. And so, a chargeback is born. Depending on the merits of the cardholder’s claim, the issuing bank will assign the chargeback a reason code and bill the merchant bank for the transaction amount. The merchant bank (aka the acquiring bank) will either resolve the chargeback, or if they determine it was caused by merchant error, the merchant is on the hook for amount.

It is only at this point that the merchant is notified of the chargeback. The merchant’s acquiring bank provides them with the transaction information and the chargeback reason code, and the merchant can either accept the chargeback or dispute it through representment.

As John Wayne once said, if you find yourself in a fight, “make damn sure you win.” When choosing representment, there are three key factors to success.

  1. Do it for the money! Let’s be clear on what your goal is with representment: Representment is not a means to reduce chargebacks. Representment can only recover revenue, it can not expunge the chargeback. Once a chargeback is initiated, it stays on your record even if your representment is successful. That’s a bummer for sure, but the up-side is you get to keep the money from the transaction.
  2. Check the reason code, of which there are many! As a general rule, qualitative reason codes are the ones you’ll want to fight, including anything that looks like friendly fraud. If you can prove that the cardholder used their own card, voluntarily, and received what they paid for, this is a good case for representment. Always represent against friendly fraud, because if you do not, that cardholder will most likely file more chargebacks in the future.
  3. Keep compelling evidence. This is by far the most important step. The cardholder’s word is enough to initiate a chargeback, but the merchant needs a mountain of proof to reverse it. You must have proof beyond doubt that the cardholder purchased, received and even consumed the item in question. Without compelling evidence, you do not have a case for representment.

Resources on Compelling Evidence

If you believe that the transaction was legitimate, that the money is yours to keep, and you have the documentation to prove it, then you should represent. Representment may not reverse a chargeback, however it preserves your reputation in good standing with the banks. If you’re successfully representing chargebacks, you show the banks you have your act together, benefiting you beyond the next representment, into all your dealings with those banks. If you’re calling out friendly fraud, this helps the banks to better identify friendly fraudsters and deal with them more effectively.

Even though the chargeback process overwhelmingly favors the cardholder, a merchant is not completely alone in fighting them. Your acquiring bank can be a resource to help you understand the process. Sometimes, there are chargebacks you may never hear about because the your acquiring bank detected an error by the cardholder or issuing bank and quashed them. However, ChargebackHelp can provide even more comprehensive support with this process.

ChargebackHelp has tremendous experience with successful representment, such that we can guarantee your ROI on representment cases. Our success rate is double the merchant average, and for good reason. We know the reason codes and the compelling evidence required of each code. We know the chargeback rebuttal process inside and out. And we know when a representment case will help you most. Your acquiring bank can’t always tell you when to choose representment, but we can. We can also help fine tune your points of sale to better capture and analyze transactional data to help your chances overall in fighting chargebacks.

If you haven’t done so already, contact us for a free chargeback analysis to see how your business can benefit from ChargebackHelp’s representment services.

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