Chargeback Re-Presentment Rights for E-Commerce Merchants

Re-presentment is a chargeback that is rejected and returned to a card issuer by the merchant’s processing bank on the merchant’s behalf. A chargeback may be re-presented, or re-deposited, if the merchant or the processing bank can remedy the problem that led to the chargeback. To be valid, a re-presentment must be in accordance with regulations established by Visa and MasterCard and to be submitted within the specified time frame. The two Credit Card Associations have the final say as to the validity of a chargeback or a re-presentment, if the two affected banks cannot resolve the issue between themselves.

E-commerce merchants must understand their re-presentment rights and work with their processing banks to apply the necessary actions in a timely manner or otherwise these rights will be lost.

• AVS and Card Security Code re-presentment rights*. In cases of chargebacks associated with the use of the?áAddress Verification Service (AVS) and the Card Security Codes (CVV2, CVC 2 and CID), processing banks can represent a charged back transaction if the merchant:
  • Received an AVS positive match in the authorization message and if the billing and shipping addresses are the same. A proof needs to be submitted of the shipping address and the delivery. You should design your sales and order processing procedures in a way that will allow you to store and easily access billing and shipping information for future references.
  • Submitted an AVS query during authorization and received a “U” response from a U.S. card issuer. This response means that the card issuer is unavailable or does not support AVS. Even though you did not receive a positive AVS match, you are still protected, because you attempted AVS verification.
  • Submitted a Card Security Code verification request during authorization and received a “U” response from a U.S. card issuer. The response means that the card issuer does not support the respective code. Just as with the above AVS verification response, you receive protection when the issuer does not support a card security code, because you attempted verification.

*Even though an acquiring bank has the right to represent a transaction on its merchant’s behalf under the above circumstances, there is no guarantee that the disputed items will be accepted.

If you believe that you have AVS or Card Security Code re-presentment rights on a charged back transaction, all available supporting evidence should be provided to the acquiring bank to be submitted with the re-presentment. Be advised that all relevant documentation must be submitted within a specified time frame. Every time supporting documentation is requested, your processor will notify you what the deadline for receiving it is. If you are late, you will forfeit your re-presentment right.

Verified by Visa and MasterCard SecureCode re-presentment rights. Merchants who participate in?áVerified by Visa and?áMasterCard SecureCode are in most cases protected from “unauthorized use” types of chargebacks. If you participate in these programs and receive a fully authenticated or attempted authentication response from the card issuer and the authentication data was provided in the authorization request, you retain re-presentment rights.

Image credit: Maricopa.edu.