A chargeback dispute letter is effectively a cover letter for a chargeback representment response. It provides any necessary information to identify the transaction, addresses the specific claims that the cardholder has presented, and outlines what supporting evidence will be provided. It also explains what outcome the merchant is seeking.
Frequently Asked Questions
An acquiring bank or acquirer is a bank or financial institution that processes payments, such as debit card or credit card transactions, on behalf of a merchant.
An issuing bank, or issuer, is the cardholder's bank. It is a member of a card association and issues payment on behalf of that association for the cardholder. Technically speaking, not all issuers are banks. Some card associations such as American Express serve as issuers themselves, bypassing the step of having a separate issuing bank.
The amount of time merchants have to respond to chargebacks varies depending on the card brand. While some specific circumstances may call for exceptions, the following time limits by card brand generally hold true:
A chargeback reason code is an alphanumeric code that indicates the claimed reason for a chargeback. Each card brand has their own unique set of reason codes. Understanding reason codes is an essential part of both fighting and preventing chargebacks.
Take the number of chargebacks over a particular period of time, divide it by the total number of transactions, and multiply by 100 in order to present it as a percentage. Different card brands have slightly different methods for calculating chargeback ratios. For example, Visa calculates chargeback rates by dividing a particular month’s chargebacks by that particular month’s total number of transactions while MasterCard divides a particular month’s chargebacks by the previous month’s total transactions.