Every business that accepts credit cards is vulnerable to payment card disputes. What should you do when that happens? In many cases, merchants do nothing. They believe that chargebacks are unavoidable, and write off the loss as a cost of doing business. Nothing could be further from the truth, though.

In reality, there are only two reasons you should ever accept a chargeback:

• A genuine mistake on your part (merchant error)
• An unauthorized transaction (criminal fraud)

You may enter a wrong account number, for example, or a criminal may use stolen information to make a purchase. However, our internal research shows that fewer than half of all chargebacks meet one of these criteria. Most chargebacks stem from cases of post-transactional fraud, commonly known as “friendly fraud.”

With few exceptions, every friendly fraud claim should be challenged through the represent process. This is where the chargeback rebuttal letter comes into play. Every part of the representment process is necessary, but as we shall see, a strong rebuttal letter is often the key to winning a reversal.

Before we dive head-first into rebuttals, however, it may be helpful to examine the reason we need them in the first place.