Writing a Charge Back Letter to Customer (with Sample)
Use this sample charge back letter to customer as a template for your formal charge back letter.
A chargeback is the process that a merchant service conducts when a credit card-issuing bank receives a request for a chargeback from a customer who disputes transactions that appear on his or her bill.
The bank has certain rights to reverse sales transactions and may do this at its own discretion or at the request of the cardholder. There are several reasons customers may request chargebacks.
The most common reasons are:
The bank has certain rights to reverse sales transactions and may do this at its own discretion or at the request of the cardholder. There are several reasons customers may request chargebacks.
The most common reasons are:
- Fraudulent cards
- Erroneous data submissions
- Processing errors
- Fraudulent transactions
- Duplicate transactions processed
- Undelivered goods
- Defective merchandise
Representment
The merchant can dispute a chargeback according to the chargeback reason code. This is called a representment. A period is dictated by the specific reason code in which a representment must be performed. There is also documentation required by the bank from the merchant. The merchant processing provider service will let the merchant what documentation is required and when.
The process begins with a customer sending a chargeback letter to their bank that they want their money back based on one of the above reasons. The bank then contacts the merchant processing service and informs it of the disputed charges. The merchant processing provider may make a judgement at this time whether it believes the dispute is valid
The merchant can dispute a chargeback according to the chargeback reason code. This is called a representment. A period is dictated by the specific reason code in which a representment must be performed. There is also documentation required by the bank from the merchant. The merchant processing provider service will let the merchant what documentation is required and when.
The process begins with a customer sending a chargeback letter to their bank that they want their money back based on one of the above reasons. The bank then contacts the merchant processing service and informs it of the disputed charges. The merchant processing provider may make a judgement at this time whether it believes the dispute is valid
Who Decides?
To make this judgement, the service provider may request a copy of the receipt for the disputed charge. If the service provider decides that the dispute is valid, it will withdraw the money from the merchant’s bank account. It will also take a chargeback fee on the next regularly scheduled fee debit date. This date should be in the merchant processing service contract.
The service will send the merchant a Chargeback Debit Advice Letter that contains the instructions for what the merchant needs to do. A Chargeback Adjustment Reversal Request form will also be sent with instructions for the merchant to challenge the chargeback request. These forms will be sent through the mail, so the merchant may see the debit before he or she gets the official notice in writing.
Dispute the Chargeback?
The merchant can decide whether or not to dispute the chargeback. If he or she does not want to dispute it, they can just do nothing. In this case, the bank will give the consumer his or her money back and the case will be considered closed.
However, merchants need to be aware that if they get chargeback requests of more than two percent of their total processing volume in a 30-day period, the merchant processing service has grounds to terminate their account.
To make this judgement, the service provider may request a copy of the receipt for the disputed charge. If the service provider decides that the dispute is valid, it will withdraw the money from the merchant’s bank account. It will also take a chargeback fee on the next regularly scheduled fee debit date. This date should be in the merchant processing service contract.
The service will send the merchant a Chargeback Debit Advice Letter that contains the instructions for what the merchant needs to do. A Chargeback Adjustment Reversal Request form will also be sent with instructions for the merchant to challenge the chargeback request. These forms will be sent through the mail, so the merchant may see the debit before he or she gets the official notice in writing.
Dispute the Chargeback?
The merchant can decide whether or not to dispute the chargeback. If he or she does not want to dispute it, they can just do nothing. In this case, the bank will give the consumer his or her money back and the case will be considered closed.
However, merchants need to be aware that if they get chargeback requests of more than two percent of their total processing volume in a 30-day period, the merchant processing service has grounds to terminate their account.
If the merchant wants to dispute the chargeback request in the hope of having it reversed, they will need to submit a Chargeback Adjustment Reversal letter within the timeframe that is given in the Chargeback Debit Advice letter. The form will list the information and documentation that is required by the merchant processing service to dispute the chargeback request.
The merchant processor will review the information given by the merchant and make a final decision on whether or not to reverse the chargeback. If the merchant processing service decides to reverse the chargeback, the money that was deducted from the merchant’s account will be returned.
Fraudulent Chargeback
Customers may also try requesting a fraudulent chargeback. To avoid this, merchants need unambiguous return policies that are made known to customers. This helps merchants avoid liability for problems that are beyond their control, according to the Chargeback Guide.
For example, customers may try to cancel payments after an item has been shipped. Good policies are required to protect merchants from being hit with chargeback requests that they cannot win.
The merchant may want to send a chargeback letter to the customer to convince him or her to withdraw the dispute. Below is a sample of a chargeback letter to a customer. It should be a formal business letter and sent by certified mail with a return receipt requested.
Sample Chargeback Letter to Customer
Merchant’s Name
Merchant’s Address
City, State, Zip Code
DATE
Customer’s Name
Customer’s Address
City, State, Zip Code
RE: Reversal request for chargeback
Dear Customer’s Name:
I have been informed by my Merchant Provider that you have requested a chargeback on the television you purchased last month. I understand that you may be irritated that you have not received your TV yet even though it has been three weeks, but I want to assure you that you will receive it within the next five days.
It is an extremely popular model and because of the holiday season, it has been difficult for our store to get the required number of units. However, this problem has been solved, and your TV is on its way to your home. It would be extremely difficult for my shop if the chargeback were allowed, so I am appealing to you to consider withdrawing your request.
Thank you for your attention to this matter. Please do not hesitate to contact me if I can be of any further help.
Sincerely,
Merchant’s Signature
Merchant’s Printed Name
By Andre Bradley
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