In an increasingly digital marketplace, card-not-present chargebacks have become an unfortunate reality for many businesses. Managing these disputes is often time-consuming and costly, tying up valuable resources that could be better used elsewhere.
First-party fraud, also known as friendly fraud, is rising rapidly. In fact, as of 2024, it became the most common type of fraud, where a customer disputes a legitimate transaction they themselves made. These disputes can severely impact revenue and operational efficiency.
While there’s no foolproof way to avoid chargebacks altogether, chargeback recovery services offer businesses a powerful way to recover lost revenue and reduce future risk. In this post, we’ll explore how chargeback recovery works, why it matters, and how a modern solution like Justt makes a measurable difference.
In this post, we’ll cover:
- What is chargeback recovery
- The chargeback process
- How documentation and evidence play a critical role in recovery
- How Justt helps merchants keep more revenue
What is chargeback recovery?
Chargeback recovery is the process of disputing and reversing illegitimate chargebacks to recover lost revenue. This is done through a process known as chargeback representment.
If a business can prove that a chargeback was unjustified, they can submit evidence to the issuing bank, requesting that the funds be returned. A successful recovery strategy can significantly improve profit margins, often reclaiming 5–10% or more, depending on the business model and industry.
Why Businesses Need Chargeback Recovery Services
When a customer initiates a chargeback, merchants typically have 7–30 days to respond, depending on the card network. During this time, they must submit compelling evidence to prove the transaction’s legitimacy.
However, the process is complex. Each card network—Visa, Mastercard, Amex, etc.—uses its own reason codes and evidence requirements. And without expert knowledge and systems in place, many businesses:
- Miss the short response window
- Submit incomplete or ineffective evidence
Which can result in a loss of revenue from the sale, chargeback fees, and a higher chargeback ratio (the ratio of chargebacks to total transactions).
Chargeback recovery services take on this burden. They:
- Analyze disputes to determine recoverability
- Collect and format the required evidence
- Submit representments on the merchant’s behalf
- Monitor outcomes and adapt future responses
Chargeback recovery services help merchants keep more of their overall revenue while reducing the operational load of properly managing and responding to chargebacks.
How does chargeback recovery work?
If a merchant suspects that a chargeback is illegitimate, they can and should attempt chargeback recovery through representment. Not only can this help recoup lost revenue from the initial transaction, but it can also help dissuade friendly fraudsters from future disputes. Chargeback recovery services help by doing all the heavy lifting in the chargeback process. From identifying chargebacks that can be successfully recovered to gathering and submitting the required merchant evidence, these services are an integral part of any chargeback management strategy.
The Chargeback Process
The chargeback process includes all steps from the initial dispute of a transaction to the resolution of the claim. The time frame for each step can vary depending on the card network, issuing bank, and other factors, but the general order is as follows:
Stage 1: The dispute
The chargeback process begins after a customer initiates a chargeback with their issuing bank and provides a reason for the dispute. Each transaction dispute is given a specific reason code that corresponds to the customer’s claim.
Stage 2: The refund
Once the issuing bank receives and validates the dispute, they credit the cardholder’s account and then forward the chargeback to the acquirer. The acquirer then withdraws the funds from the merchant’s account and sends the merchant a chargeback notice with a numeric code that corresponds to the reason for the chargeback.
Stage 3: The option to represent
The merchant then has the option to accept or challenge the chargeback. If the merchant does not provide sufficient evidence that the transaction was legitimate within the specified time frame, the chargeback is automatically finalized and the merchant loses the dispute.
Stage 4: Issuing bank’s review
At this stage, the issuing bank will review the merchant’s evidence and make a decision on the chargeback. If the merchant is successful in proving that the transaction was legitimate, the chargeback is reversed and the merchant will receive a credit for the original transaction amount. If the merchant is unsuccessful, the credit the cardholder received in Step 2 is finalized and the merchant loses the dispute. In rare cases, the case may proceed to arbitration by credit card network if the merchant and issuer disagree on the outcome of the chargeback.
What Evidence Is Needed to Win a Chargeback?
Merchants must provide enough documentation to prove the legitimacy of a transaction to win chargeback disputes. Some common types of evidence that are often used in chargeback representment disputes include:
Sales receipt
This document should be an original, unaltered copy that includes all relevant details about the transaction, such as the date, time, amount, and any applicable sales tax.
Customer signature
If the customer picked up the merchandise in person, a copy of the signed sales receipt or delivery confirmation can be used as evidence. If the customer paid for the merchandise online, a copy of the signed terms and conditions form can be used.
Tracking information
This type of evidence is typically used for transactions involving the shipment of physical goods. A copy of the tracking information showing when the merchandise was delivered to the customer’s address can supplement the sales receipt and help prove that the customer received the merchandise.
Customer service records
Any correspondence between the customer and merchant regarding the transaction in question can be used as evidence. This might include emails, chat logs, or other records that show the customer was satisfied with the merchandise or services received.
A copy of the refund/return policy
This document can help prove that the customer was aware of the merchant’s refund/return policy before they made the purchase. Merchants should keep in mind that the card networks may place different requirements on refund/return policies, so it’s important to check the guidelines before using this type of evidence.
Chargeback recovery with Justt
Businesses in search of a hands-off, risk-free chargeback recovery service with a proven track record of success can turn to Justt. Justt is a leading provider of chargeback representment services, with a team of experts that work with businesses to create a bespoke strategy that’s tailored to fit their specific needs. By combining artificial intelligence and automation with human expertise, Justt is able to provide a service that’s both effective and affordable. And because Justt only charges a performance-based fee if they’re successful in recovering funds, businesses can rest assured knowing there is no risk involved.
If you’re concerned about chargebacks and would like to learn more about how Justt can help protect your business’s bottom line, contact us.
Chargeback Recovery FAQs
What is chargeback recovery?
Chargeback recovery is the process of disputing illegitimate chargebacks to recoup lost revenue. It involves submitting evidence to the issuing bank to prove the validity of the original transaction.
How long does the chargeback recovery process take?
The timeline can vary depending on the card network and issuing bank, but most disputes are resolved within 30–90 days.
Can I recover money from friendly fraud chargebacks?
Yes, if you have compelling evidence such as order confirmations, delivery tracking, or signed agreements, many friendly fraud cases can be successfully contested.
What percentage of chargebacks are recoverable?
Recovery rates vary by industry and dispute strategy. With expert help like Justt’s, businesses can recover a significant portion—sometimes over 80%—of winnable disputes.
Is using a chargeback recovery service worth it?
Yes. These services save time, reduce lost revenue, and minimize operational strain—especially for businesses facing high volumes of disputes.
How is Justt different from other chargeback recovery providers?
Justt combines AI automation with expert oversight and only charges on recovered funds, making it a risk-free, performance-based solution tailored to your specific needs.
