Chargeback Handling Lifecycle

A credit card chargeback is a dispute between a cardholder and a merchant over a certain amount of money.  Every credit card association (Visa, MasterCard, American Express) has its own chargeback lifecycle, but some general phases can be pointed out.

The cycle starts when a cardholder contacts the bank and asks to provide him/her with the details of some specific transaction. The merchant needs to send the information to the cardholder. In case when the cardholder is not satisfied with the result a chargeback is issued and the disputed amount is automatically transferred back to the cardholder.

The merchant can dispute a chargeback (submit a representment). First of all he/she needs to prepare the required documentation and send it to the acquirer for the review. If the acquirer considers that the information is sufficient the chargeback is reversed and the merchant gets the money back.

In case when the cardholder does not agree with the decision several chargeback disputing rounds can take place (the amount of disputing rounds allowed vary depending on the association). If the cardholder and the merchant cannot agree the arbitration is requested. The arbitration is the final round where the decision is made by the association and cannot be disputed further.

Chargeback disputing requires a lot of time and efforts so now it is clear why payment processing companies do not want to work with businesses which have a lot of chargebacks and do not want to dispute low amount transactions.

Learn more about chargeback handling lifecycle from the article at #Paylosophy.

And those who want to find out how to reduce the amount of chargebacks and protect their businesses from fraudsters should visit #UniPayGateway.