Chargeback Process
There are several reasons for a chargeback. They include:
- Consumer is not happy and satisfied with the goods or services he received.
- The card was charged but for a different amount than expected.
- The customer was billed twice or more times.
- A credit card fraud happened when an unauthorised transaction appeared on the consumer’s card. This is one of the most common reasons for chargeback.
- The card data were stolen and using it unauthorised transactions were done.
Chargeback Process
Through the chargeback process you can cancel a transaction made on a credit or debit card. Here is the chargeback process explained in a simplified way.
The process of chargeback is similar to legal procedures. Both the party the cardholder and the merchant provide evidence supporting
their claims. A dispute is filed in favour of the cardholder.
First, the card owner files a dispute and contacts the issuer in relation to a particular transaction. The issuer is the cardholder’s bank that
issued him or her the card.
The issuer reviews the dispute case and then forward the dispute to the acquiring bank. Issuing bank extends provisional credit.
The dispute is resolved between the issuing and acquiring bank if possible. Otherwise, the merchant is notified of the chargeback by the acquiring bank.
The merchant either accepts the chargeback or disapproves the claim through a response known as a representment.
The issuer bank reviews the evidence and is responsible to make a final decision. If the merchant’s evidence is satisfactory, then the
provisional credit is reversed back to the merchant.
If any party is unhappy with the decision, the chargeback process goes to the pre-arbitration phase. If banks can’t resolve during pre-
arbitration, the process enters into arbitration. The card network then makes a final decision after examining all evidence.
