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The chargeback process

There are four stages in the chargeback process:

  1. Retrieval request
  2. First chargeback
  3. Second chargeback
  4. Arbitration

Retrieval request

When a cardholder disputes a transaction, their issuing bank asks you to send evidence about the transaction. This is known as a retrieval request.

Note: The issuing bank can skip this stage and issue a first chargeback if they don’t need you to send evidence about the transaction.

The issuing bank reviews your evidence and decides if your evidence is sufficient.

  • The evidence is sufficient. The issuing bank then closes the retrieval request.
  • The evidence isn’t sufficient. The issuing bank progresses the retrieval request to a first chargeback and asks your processor to send you a chargeback notification.

First chargeback

When the issuing bank issues a chargeback, they ask your processor to remove the transaction amount from your bank account and send you a chargeback notification by mail. If you accept the chargeback, the cardholder receives the dollar amount for the transaction and the issuing bank closes the dispute.
If you respond to the first chargeback notification, the issuing bank reviews your evidence and decides if your evidence is sufficient.

  • The evidence is sufficient. You receive the dollar amount for the transaction.
  • The evidence isn’t sufficient. The cardholder receives the dollar amount for the transaction.

If you disagree with the issuing bank’s decision and you still want to dispute the chargeback, the issuing bank continues the process with a second chargeback.

Second chargeback (Pre-arbitration)

When you dispute a first chargeback and the issuing bank decides the evidence isn’t sufficient, they issue a second chargeback, then one of the following happens:

  • You agree with the issuing bank’s decision. The cardholder receives the dollar amount for the transaction.
  • You don’t agree with the issuing bank’s decision. The issuing bank progresses the second chargeback to arbitration.

Arbitration

During the arbitration stage, the card brand reviews your evidence, then one of the following happens:

  • The card brand decides your evidence is sufficient. You receive the dollar amount for the transaction.
  • The card brand decides your evidence isn’t sufficient. The cardholder receives the dollar amount for the transaction.
Note: The card brand’s decision is final.

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