Chargeback process

Chargeback process initiates with a disputed payment, typically initiated by the cardholder, although in some instances, the issuing bank may file a chargeback for technical reasons. Once the merchant is notified of the dispute, they have two options: accept the chargeback or pursue representment. If the merchant accepts the chargeback, the cardholder retains the refunded funds and closes the case. 

However, suppose the merchant decides to challenge the chargeback through representment. In that case, they must submit evidence to the issuing bank, which will then review the information and determine whether to reverse the chargeback. If the issuer upholds the chargeback, the case can be appealed to the credit card network. 

The primary participants in the chargeback process include the cardholder/customer, the merchant, the issuing bank (Issuer), the acquiring bank (Acquirer), and, in some cases, the credit card network. 

The chargeback process can be demanding for merchants due to the significant involvement required at each stage. Every step requires the merchant to take some action or respond to proceed. Failure to respond may result in the chargeback being accepted as a default, making it permanent and non-contestable. 

Merchants must be attentive to expected responses and corresponding deadlines, which may vary across networks and can be further complicated by factors such as chargeback alerts or deflection services. Proactively adhering to required actions and timelines is crucial for effectively navigating the chargeback process.