Find Out How To Dispute A Chargeback

A chargeback is a dispute between a merchant and a cardholder over a certain amount of money. Chargebacks are initiated by cardholders when they believe that money was charged illegitimately or by mistake. It is obvious that it is impossible to avoid chargebacks, that’s why you need to know how to handle them.

Every association (e.g. Visa, MasterCard, Discover, etc.) has its own chargeback lifecycle and its own rules of chargeback disputing. But some general phases can be pointed out. The cycle starts when a cardholder contacts the bank and asks about the details of a certain transaction. A merchant has to provide a cardholder with the information he/she wants. There are two scenarios possible. If a cardholder is satisfied with the answer nothing else happens, if not – a chargeback is issued and money is automatically sent back to the cardholder. In case when the merchant does not agree he/she can dispute it.

The first phase is called representment. The merchant prepares the required information and sends it to the acquirer for the review. If the acquirer finds this information sufficient the money is transferred back to the merchant. But if the cardholder still does not agree several disputing rounds can take place. The amount of the disputing rounds allowed is limited by the association. In case when a cardholder and a merchant are not able to agree the arbitration happens. This is a final review of the chargeback which is done by the association and the decision cannot be disputed further.   

You will agree that chargeback disputing is a complicated procedure which usually takes a lot of time and efforts so traditionally low amount transactions are not disputed.

Do you want to learn more about chargeback handling lifecycle? Read articles at #UnipayGateway (texts of articles are available here).