Chargeback Handling Lifecycle

If you deal with electronic payments, you are familiar with a problem of chargeback. In the sphere of electronic payments chargeback is defined as a dispute between a cardholder and a merchant in case when a cardholder believes that a certain amount of money has been charged illegitimately or by mistake. How does a chargeback lifecycle look like:

• A cardholder contacts the bank for inquiring about a particular transaction or disputing a charge and requesting a refund;
• the disputed amount of money is automatically given back to the cardholder (when a chargeback is issued);
• a merchant can dispute a chargeback and submit re-presentment;
• the acquirer reviews all  the information given by a merchant (if it is sufficient, the chargeback amount is returned to a merchant);
• the second round of chargeback disputing can be set in case one of the sides is not satisfied with the results of the previous round (the number of rounds is limited by a credit card association);
• when a cardholder an a merchant cannot come to an agreement, the arbitration takes place (the final decision made by association that cannot be changed further).

The deep explanation of the chargeback handling lifecycle can be found in article on Paylosophy