There are up to four stages in the chargeback process:
- Retrieval request
- First chargeback
- Second chargeback, also known as pre-arbitration
A retrieval request is when a cardholder's bank asks a merchant to send information about a transaction. A retrieval request does not cost you anything, however, not responding to the request leads to a chargeback.
If the issuing bank does not need more information about the transaction, they can skip this stage and issue a first chargeback.
If a cardholder and issuing bank do not need any more information about a transaction, they can dispute the transaction by issuing the first chargeback. The issuing bank can also issue a first chargeback if the merchant does not provide sufficient evidence in response to the retrieval request.
If the merchant disputes the chargeback, the dispute moves to the next stage. If the merchant does not dispute the chargeback, the cardholder receives the disputed amount.
A second chargeback is also known as pre-arbitration. During the second chargeback stage, the issuing bank can issue a second chargeback. If the merchant disputes the chargeback the dispute moves to the arbitration stage.
Arbitration is the last stage in the chargeback process, but most disputes do not end in arbitration. The card brand makes the final decision about whether the cardholder or the merchant receives the disputed transaction amount.
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