.. _chargeback_flow: :orphan: .. meta:: :description: Chargeback flow and transaction types in Payneteasy: retrieval request, chargeback, representment, pre-arbitration, arbitration and related VISA/MC rules. Chargeback flow and transaction types ####################################### .. role:: ex .. role:: code Chargeback terms ==================== +-------------------------------+--------------------------------------------------------------------------------------------------+ | Name | Description | +===============================+==================================================================================================+ | :code:`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 | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`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 | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`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 | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`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 | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`Prearbitration` | An attempt to resolve the dispute before filing with VISA/MC Arbitration Committee | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`Arbitration` | A process whereby financial liability for Transactions processed through Interchange that are | | | presented and charged back is determined by VISA/MC | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`CPD` | A date when a record (transaction, chargeback, retrieval request etc) has been processed by | | (Central Processing Date) | international payment card schemes | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`Compliance` | A process whereby disputes that arise from violations of any rules governing a Transaction, and | | | no Chargeback right is available, are determined | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`Good Faith Letter` | An attempt to resolve the dispute when no chargeback of compliance rights exist | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`SAFE/Fraud Advice TC40`| A record prepared by an Issuer to inform VISA/MC of fraudulent merchant activity | +-------------------------------+--------------------------------------------------------------------------------------------------+ | :code:`TID (Transaction | Term used for transaction documentation, such as form sets, records, sales slips, terminal | | information document)` | receipts, and record of charges | +-------------------------------+--------------------------------------------------------------------------------------------------+ MasterCard Chargeback Guide ============================== Chargeback Flow ---------------------- .. uml:: 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 | | +-----------+-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+ | | | Retrieval Request | Issuer may request a copy of the sales ticket to support or identify a| 1644-603 | retrieval | | | | | potential chargeback | | | | | 30 days | | | | | | | | | NOTE | | | 45/60/120/540 days | | | | | | | | | | | Most chargebacks do not require a retrieval request | | | | | +-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+ | | | Retrieval request fulfilment | | | | | +-----------+-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+ | | | Chargeback | Issuer initiates a chargeback within the time frame applicable to the | 1442-450(full amount) | chargeback | | | | | specific message reason (Refer to section 3, MasterCard Message | | | | | | | Reason Codes—Dual Message System Transactions for details.) | 1442-453(partial amount)| | | | | | | | | | | | | NOTE | | | | | | | | | | | | | | If an issuer receives a legible copy of the TID through a second | | | | | | | presentment for message reason code 4802—Requested/Required | | | | | 45 days | | 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 | | | | | +-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+--------------------+ | | Second Presentment | When applicable, the acquirer may process a second presentment within | 1240-205(full amount) | chargeback_reversal | | | | | 45 calendar days of the Central Site Business Date (PDS 0158 [Business| | | | | | | Activity], subfield 5 [Business Date]) of the chargeback | 1240-282(partial amount)| | | +-----------+-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+ 45 days | | | Arbitration Chargeback | When applicable, the issuer may initiate an arbitration chargeback | 1442-451(full amount) | prearbitration | | | | | within 45 calendar days of the Central Site Business Date of the | | | | | | | second presentment | 1442-454(partial amount)| | | | 45 days +-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+--------------------+ | | Arbitration Case Filing | The acquirer may file an arbitration case to MasterCard for a decision| N/A | arbitration | | | | | on the dispute within 45 calendar days of the Central Site Business | | | | | | | Date of the arbitration chargeback | | | | +-----------+-------------------------------------------+-----------------------------------------------------------------------+-------------------------+----------------------+--------------------+ Visa Chargeback Guide ======================== Chargeback Flow ---------------------- .. uml:: 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 | | +----------+---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+ | | | Retrieval Request | Issuer may request a copy of the sales ticket to support or identify a potential chargeback | retrieval | | | 30 days +---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+ 75/120/540 days | | | Retrieval Request Fulfil | | | | +----------+---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+ | | | Chargeback | Issuer initiates a chargeback within the time frame applicable to the specific message | chargeback | | | | | reason | | | | 45 days +---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+--------+-----------+ | | Representment | When applicable, the acquirer may process a second presentment | chargeback_reversal| | | +----------+---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+ 29 days| | | | Prearbitration Attempt | Before filing for Arbitration, the requesting Member must make a pre-Arbitration attempt | prearbitration | | | | | | 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 | | | | | 30 days | | * The Acquirer represented with Compelling Evidence. The Issuer must certify in its | | | 60(30*) | | | | pre-Arbitration attempt that it attempted to contact the Cardholder to review the | | | days | | | | 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 Response | | | | | +----------+---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+ | | | | Arbitration | If the opposing Member does not accept financial responsibility for the disputed | arbitration | | | | | | Transaction, the requesting Member may pursue Arbitration | | 30 days| | | +---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+ | | | | 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 | If the opposing Member does not accept financial liability for the disputed Transaction, the| | | Pre-Compliance | requesting Member may pursue Compliance | | +---------------------------------------------+---------------------------------------------------------------------------------------------+--------------------+