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The Chargebacks Dispute step by step process

Below we will describe the chargeback the general chargeback process and how WorldCard can review and process this claims accordingly.

Step 1: The cardholder files a chargeback with their bank, demanding a refund.
This happens when either the cardholder could not get their money back from the merchant via a refund or the merchant does not feel that the cardholder is entitled to one.
A chargeback can be filed within 180 calendar days of the original transaction.

Step 2: The cardholder’s bank reviews the claim and assigns a reason code to it.
If the dispute stands, it is sent to the merchant’s acquirer and the corresponding funds are deducted from the merchant’s account.

Step 3: The acquirer receives the claim and notifies the merchant.
The acquirer receives the chargeback claim along with supporting documents. The merchant is notified of the chargeback and asked to present evidence to disprove the claim.

Step 4: The merchant reviews the Chargeback.
If the merchant feels that the claim is valid, they can choose to accept the chargeback and not dispute further.
In the case that the merchant has sufficient proof to re-present their claim, the relevant documentation is sent to the acquirer within the provided timeframe depending on the card scheme, who in turn sends it to the cardholder’s bank to review.

Step 5 The merchant Dispute:

Evidence:
A cardholder’s dispute usually contains general details such as: cardholder’s name, date of purchase, masked CC numbers, chargeback reason code, the Acquirer reference number (ARN) of the transaction in dispute and any number of supporting documents that might contain correspondence between the cardholder and the merchant or other relevant proof.

A merchant’s re-presentment should contain matching general information about the case such as cardholder name, masked CC numbers with which the purchase was made, date and amount of purchase and the Acquirer reference number (ARN) ) of the transaction in dispute.

Documentation:

Within the dispute the merchant should make an introduction of the products and services it offers and a general overview of the claim made.

More importantly the re-presentment should contain proof of purchase, cancellation and or withdrawal policy where applicable, correspondence between the merchant and  the cardholder, to support the case, any log or screenshot to prove the cardholder might have used the product/services prior to filling a chargeback and proof that the Terms and Conditions are in a clearly visible place and that have been actively read and been accepted by the user before subscribing to the service, meaning the purchase cannot be completed without accepting them and that the purchase was made with 3DSecure meaning that the customer could not have made the purchase unknowingly. In case the chargeback reason is related to “unauthorized charge”, proof that the user has completed the KYC or other verification method, process should be provided without including sensitive information such as user’s ID or proof of address.

Step 6: The cardholder’s bank reviews the Re-Presentment.
Once the documents supporting the merchant’s case have been received, the merchant’s account is credited the disputed funds.
The bank then reviews the evidence provided by the merchant and should the issuer find it sufficient, the dispute ends.
However, if the bank considers the presented evidence not enough, the case escalates to Pre-Arbitration.

Step 7: Pre-Arbitration.
The cardholder’s bank sends the notification along with supporting documentation to the acquirer stating that the evidence presented is not enough and the case is still disputed.
The merchant’s account is debited the disputed funds.
The merchant is notified by the acquirer about the escalation of the case and provided the new dispute documentation and is once again asked to make a decision.
Should the merchant accept the case; the dispute ends here.

Step 8: Pre-Arbitration Re-Presentment.
If the merchant wishes to dispute further, they must present further documentation as evidence to support their claim as well as refute the new evidence provided by the issuer within the provided timeframe depending on the card scheme.
The documentation is sent to the acquirer who in turn, sends it to the cardholder’s bank to review.

Step 9: The cardholder’s bank reviews the Pre-Arbitration Re-Presentment.
Once the documents supporting the merchant’s case have been received, the merchant’s account is credited the disputed funds.
The bank then reviews the evidence provided by the merchant and should it find it sufficient, that ends the dispute.
However, if the bank considers the presented evidence not enough, the case escalates to Arbitration.

Step 10: Arbitration.

The cardholder’s bank sends the notification to the acquirer stating that the evidence presented is not enough and the case is still disputed.
The merchant’s account is debited the disputed funds.
The merchant is notified by the acquirer about the escalation of the case and is once again asked to make a decision.
Should the merchant accept the case; the dispute ends here, however the merchant is liable to Arbitration fees according to the card scheme.

Step 11: Arbitration Decision.
If the merchant wishes to decline the Arbitration, they must notify the acquirer within the provided timeframe depending on the card scheme.
The decision is then sent to the cardholder’s bank.

Step 12: Card Scheme Committee.
At this point, the case is no longer in the hands of the bank; it is sent to the corresponding card scheme’s impartial committee for a ruling.
The committee’s decision is final and the relevant parties should accept the outcome.
In case the ruling is in the merchant’s favor, they will not be liable for any fees. But if the ruling is in the issuer’s favor, the merchant will be liable for the amount of the disputed transactions as well as the filing and review fees, and technical penalty fees charged per any technical violation occurring in any of the disputes.

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