6.3. Chargeback flow and transaction types

6.3.1. 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.
Chargdeback 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 chatgeback for a valid reason as describet in MC rules.
Prearbitration An attept 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.
Compiance A process whereby disputes that arise from violations of any rules govering 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 transation documentation, such as formsets, records, sales slips, terminal receipts, and record of charges.

6.3.2. MasterCard Chargeback Guide

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  

6.3.3. Visa Chargeback Guide

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

6.3.4. 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.