Chargeback Arbitration

hat is Chargeback Arbitration?

When a bank, cardholder or merchant can’t resolve a dispute on their own, you may advance along the process to the chargeback arbitration stage. During this stage, a card representative will review your case and make a final judgement.

How Does Chargeback Arbitration Work?

Chargebacks give cardholders the right to dispute transactions.

What happens if you don’t agree with a chargeback?

In the event that you want to dispute a chargeback, you can challenge it through a process called representment.

Just like a court case, you will be required to provide evidence to counter the chargeback during representment. Without sufficient or strong enough evidence, the cardholder’s issuing bank may reject your case and file a second chargeback, otherwise known as a pre-arbitration chargeback.

What happens if you don’t want to accept the second chargeback?

You do have the option to appeal a second chargeback and an arbitrator from the card network will review your case. The cardholder must accept or deny the motion for arbitration. If the cardholder accepts, the case goes into arbitration for a final decision.

It’s important to know that if a dispute makes it to the arbitration stage, it’s likely that the outcome won’t be favorable for you as a merchant.

How to Prevent Chargeback Arbitration

A chargeback arbitration prolongs the dispute which means you will incur additional fees and time spent on your dispute.

Chargeback arbitrations should be avoided and should only be looked at as a last resort. To avoid chargeback arbitration, it’s recommended that you avoid chargebacks altogether.

Need Expert Help?

We can help you identify chargeback prevention strategies for your business so that you can minimize your risk. For more information, get in touch with us here.