What is Compelling Evidence?

September 1, 2020/ Jessica Velasco /

As a merchant, you have two options for responding to a customer chargeback: either accept the loss, or try to recover the funds through the representment process. If you choose to fight the chargeback, the success of your representment will depend largely on the compelling evidence you submit.

When you submit a transaction for representment, it’s not enough to simply submit the same documentation that was already rejected by the issuer. You need to supplement it with a rebuttal letter that explains why the original transaction was legitimate. The rebuttal letter also requires compelling evidence to substantiate your claim.

The stronger the evidence you can submit, the more likely it is that the bank will rule in your favor.

Examples of Compelling Evidence for a Dispute

There’s no single piece of evidence that will guarantee a foolproof win for you. However, below is a list of commonly-used pieces of documentation that might help you dispute a charge:

• A copy of the customer’s photo ID
• An invoice or transaction receipt
• Proof of delivery with customer signature
• Transcripts of any phone/email/social media communications with customer
• Proof of address and/or CVV verification
• IP address match
• Geolocation match
• Proof of use (for digital goods)
• Copy of terms and conditions verified by customer
• Photos or other proof that customer received or used the goods or services purchased

This is not an exhaustive list. In effect, any documentation that contradicts the cardholder’s claim could be a potential asset during a dispute. Remember: The specific document is less important than the function it serves as a piece of evidence.

You can determine which pieces of evidence would be considered most compelling in each situation by looking at the chargeback reason code attached to the dispute. For example, let’s assume a cardholder files a chargeback using Visa Reason Code 13.1: Merchandise/Services Not Received. In this scenario, the cardholder is claiming that you never provided the goods or services agreed upon at the time of purchase. Thus, your task is to make a convincing case that you did, in fact, provide what was promised to the right recipient.

Obstacles to Your Chargeback Dispute

Of course, assembling a compelling chargeback case will require a significant investment of time and energy. You need to carefully examine each individual cardholder claim and prepare a customized case in response to the claim. And, there’s still no guarantee of success, even with an airtight case.

This is due to several factors outside your control, including:

• Inconsistent Practices: Card network rules, government regulations, and technologies change constantly. This results in a complex—and often inconsistent—patchwork of policies and practices in chargeback management.
• Limitations on Resources: As mentioned above, managing chargeback disputes is a time-consuming, expensive process. Most merchants don’t have the resources to devote to full-time chargeback management.
• Poor Odds: Even with solid, compelling evidence, there’s no guarantee you’ll recover your funds. The bank might dismiss your claim and file a pre-arbitration (formerly known as a “second chargeback”).

That’s not to say that you shouldn’t engage in chargeback representment. On the contrary, if you believe that a chargeback is illegitimate, you should definitely respond. However, you need to take steps to make your representment more effective.

Tips for Gathering Compelling Evidence

Here are a couple of questions to ask while gathering compelling evidence:

• Is the customer familiar? Has a buyer using the same IP address purchased from you before? If so, that individual should be familiar with your products, policies, and procedures.
• Does all cardholder information match? Did you accept the transaction without first verifying that all the buyer’s information is valid?
• Can you verify delivery in any way? For instance, did you use delivery confirmation, a tracking number, or download logging?
• Did the buyer actively agree to your terms of service before completing a purchase? Which policies would be most relevant to gathering compelling evidence?
• Did the buyer contact you at any point? Customers are always supposed to try contacting and resolving issues with you before turning to the bank.

Can you manage on your own? Given your dispute volume, would it be more effective to turn to a third-party for chargeback management?

Last Update: August 19, 2020