Chargeback flow and transaction types

Chargeback terms

Name

Description

Retrieval Request

An Issuer`s request for a Transaction Receipt, which could include the original, a paper copy of facsimile, or an electronic version thereof

Chargeback

A Transaction that an Issuer returns to an Acquirer. The Issuer can only make chargeback for a valid reason as described in VISA/MC rules

Representment

  • an Acquirer rejects or responds to the chargeback made by the Issuer and

  • sends the transaction back to the Issuer and

  • supports it with additional documentation that remedies the disagreement

The Acquirer can only make representment for a valid reason as described in VISA/MC rules

As this is the 2nd time that Acquirer presented this transaction to the Issuer, it is called representment

Arbitration Chargeback

A Transaction that an Issuer returns to an Acquirer for the 2nd time. The Issuer can only make chargeback for a valid reason as described in MC rules

Prearbitration

An attempt to resolve the dispute before filing with VISA/MC Arbitration Committee

Arbitration

A process whereby financial liability for Transactions processed through Interchange that are presented and charged back is determined by VISA/MC

CPD (Central Processing Date)

A date when a record (transaction, chargeback, retrieval request etc) has been processed by international payment card schemes

Compliance

A process whereby disputes that arise from violations of any rules governing a Transaction, and no Chargeback right is available, are determined

Good Faith Letter

An attempt to resolve the dispute when no chargeback of compliance rights exist

SAFE/Fraud Advice TC40

A record prepared by an Issuer to inform VISA/MC of fraudulent merchant activity

TID (Transaction information document)

Term used for transaction documentation, such as form sets, records, sales slips, terminal receipts, and record of charges

MasterCard Chargeback Guide

Chargeback Flow

participant MasterCard
participant Acquirer
participant Issuer


activate Issuer
"Acquirer" -> "Issuer": First Presentment - 7 days

 "Acquirer" //-- "Issuer": Retrieval request
 activate Acquirer

 "Acquirer" --> "Issuer": Retrieval request fulfilment

 deactivate Acquirer

 "Issuer" -> "Acquirer": Сhargeback
 deactivate Issuer

 activate Acquirer

 "Acquirer" -> "Issuer": Second Presentment

 deactivate Acquirer
 activate Issuer

 "Issuer" -> "Acquirer": Arbitration Chargeback
 deactivate Issuer
 activate Acquirer
 Acquirer -> MasterCard: ARBITRATION
 deactivate Acquirer

Chargeback Stages

Stage

Description

MIT-Function Code(s)

API Method

First Presentment

Acquirer submits the transaction to the issuer

1240-200

sale

45/60/120/540 days

30 days

Retrieval Request

Issuer may request a copy of the sales ticket to support or identify a potential chargeback

NOTE

Most chargebacks do not require a retrieval request

1644-603

retrieval

Retrieval request fulfilment

45 days

Chargeback

Issuer initiates a chargeback within the time frame applicable to the specific message reason (Refer to section 3, MasterCard Message Reason Codes—Dual Message System Transactions for details.)

NOTE

If an issuer receives a legible copy of the TID through a second presentment for message reason code 4802—Requested/Required Information Illegible or Missing, and after viewing the item for the first time determines that it has another right of chargeback for a different message reason code, the issuer must start the process again with a new chargeback. Refer to section Message Reason Code 4802—Requested/Required Information Illegible or Missing for more information

1442-450(full amount)

1442-453(partial amount)

chargeback

Second Presentment

When applicable, the acquirer may process a second presentment within 45 calendar days of the Central Site Business Date (PDS 0158 [Business Activity], subfield 5 [Business Date]) of the chargeback

1240-205(full amount)

1240-282(partial amount)

chargeback_reversal

45 days

45 days

Arbitration Chargeback

When applicable, the issuer may initiate an arbitration chargeback within 45 calendar days of the Central Site Business Date of the second presentment

1442-451(full amount)

1442-454(partial amount)

prearbitration

Arbitration Case Filing

The acquirer may file an arbitration case to MasterCard for a decision on the dispute within 45 calendar days of the Central Site Business Date of the arbitration chargeback

N/A

arbitration

Visa Chargeback Guide

Chargeback Flow

participant Acquirer
participant Issuer
participant VISA

activate Issuer
"Acquirer" -> "Issuer": First Presentment - 6 days

 "Acquirer" //-- "Issuer": Retrieval request
 activate Acquirer

 "Acquirer" --> "Issuer": Retrieval request fulfilment

 deactivate Acquirer

 "Issuer" -> "Acquirer": Сhargeback
 deactivate Issuer
 activate Acquirer

  "Acquirer" -> "Issuer": Representment

 deactivate Acquirer
 activate Issuer

  "Acquirer" //-- "Issuer": Prearbitration attempt

 activate Acquirer

 "Acquirer" --> "Issuer": Prearbitration response

  deactivate Acquirer
  Issuer -> VISA:    ARBITRATION
  deactivate Issuer

Chargeback Stages

Stage

Description

API Method

First Presentment

Acquirer submits the transaction to the issuer

sale

75/120/540 days

30 days

Retrieval Request

Issuer may request a copy of the sales ticket to support or identify a potential chargeback

retrieval

Retrieval Request Fulfil

45 days

Chargeback

Issuer initiates a chargeback within the time frame applicable to the specific message reason

chargeback

Representment

When applicable, the acquirer may process a second presentment

chargeback_reversal

29 days

60(30*) days

30 days

Prearbitration Attempt

Before filing for Arbitration, the requesting Member must make a pre-Arbitration attempt using Visa Resolve Online, at least a full 30 calendar days prior to the Arbitration filing date if any of the following conditions apply:

  • New documentation or information is being provided to the opposing Member about the dispute

  • The Acquirer represented with Compelling Evidence. The Issuer must certify in its pre-Arbitration attempt that it attempted to contact the Cardholder to review the Compelling Evidence.

  • The Issuer changes the reason code for the dispute after the Representment was processed

  • The Acquirer provided evidence that the Cardholder no longer disputes the Transaction. The Issuer must certify in its pre-Arbitration attempt that the Cardholder still disputes the Transaction

prearbitration

Prearbitration Response

30 days

Arbitration

If the opposing Member does not accept financial responsibility for the disputed Transaction, the requesting Member may pursue Arbitration

arbitration

Arbitration Appeal

The decision on any permitted appeal is final and not subject to any challenge

* 30 days apply if no prearbitration attempt

Visa Compliance Guide

Chargeback Stages

Stage

Description

API Method

First Presentment

Acquirer submits the transaction to the issuer

sale

Cardholder or issuer disputes the first presentment

Pre-Compliance

Before filing for Compliance, the requesting Member must attempt to resolve the dispute with the opposing Member. This attempt must include all of the following:

  • Attempt date

  • Clear identification as pre-Compliance attempt

  • Planned Compliance filing date

  • All pertinent documentation

  • Specific violation of the Visa International Operating Regulations

A pre-Compliance attempt must include the information required in the Pre-Compliance Attempt Questionnaire. The pre-Compliance attempt must be sent electronically, using Visa Resolve Online, at least a full 30 calendar days prior to the Compliance filing date

Pre-Compliance Acceptance

If the opposing Member accepts financial liability for the disputed Transaction, it must credit the requesting Member for the last amount received by the requesting Member through VisaNet within 30 calendar days of the pre-Compliance attempt date

Non-Acceptance of Financial Liability for Pre-Compliance

If the opposing Member does not accept financial liability for the disputed Transaction, the requesting Member may pursue Compliance