Understanding the Basics of Chargebacks

 

Moving through the language of payments can be overwhelming.  We’d like to help you understand the chargeback process by removing some of the complexity and defining everything more clearly.

 

Some of the most common terms in the language of chargebacks can be found below:

 

Retrieval Request is a request for transaction information (such as a sales receipt, invoice, or contract) for a particular transaction.  This can occur when a cardholder does not recognize a transaction on their billing statement.

 

 

Chargeback is the process of the Issuer sending the transaction back to the merchant.  This can occur because of a processing technicality, a customer dispute or fraudulent activity.

 

 

Re-presentment is the merchant rebuttal to a chargeback, sent back to the Issuer for review.  This is the process by which a merchant can respond to a chargeback with an Issuing bank and allows the merchant to present evidence to prove the chargeback is not warranted.

 

 

Pre-arbitration or Second Chargeback can occur if the Issuer does not agree with the re-presentment.

 

 

Arbitration can occur when the Issuer continues to dispute the case and does not accept the previous re-presentment, pre-arbitration response, or second chargeback response.   At this stage, the card brand will determine financial liability between members.

 

 

Pre-compliance is notification to the other party that a violation of the network rules and regulations has occurred and no chargeback rights are available.  

 

 

Compliance is the escalation of the pre-compliance case to the card brand if a resolution has not been reached.