The chargeback process begins when a cardholder disputes a transaction with their issuing bank. This usually stems from reasons like unauthorized use, goods or services not received, or dissatisfaction with a purchase. Upon receiving the dispute, the issuing bank initiates a “retrieval request,” demanding documentation from the merchant’s acquiring bank as proof that the transaction was valid. This is the first step, and it’s crucial for the merchant to understand that a retrieval isn’t a chargeback yet, but an official inquiry. The retrieval request will contain details of the disputed transaction and a specific reason code identifying the cardholder’s concern. This request lands in the hands of the Retrieval Chargeback Department.
Initial Investigation and Documentation
Upon receiving a retrieval request, the Retrieval Chargeback Department immediately begins its investigation. This involves gathering necessary details of the disputed transaction from the merchant’s account and their systems. The department aims to collect all relevant evidence to prove the legitimacy of the charge. This includes transaction records, order confirmation emails, proof of delivery, signed receipts, and any other supporting documentation related to the specific sale. The timeline for this phase is usually short, often days, to ensure the timely submission of the required documents to the acquirer. The thoroughness of this step is critical as the quality of the provided evidence directly influences the dispute’s outcome.
Evidence Submission and Timeline
The collected documentation is then compiled and submitted to the acquiring bank within the specified timeframe, which can be as short as a few business days. The acquiring bank acts as an intermediary and forwards the evidence to the issuing bank for review. The response to the retrieval request is not a guarantee that the dispute will be resolved in the merchant’s favor; however, a failure to respond or provide adequate evidence will almost certainly lead to a chargeback. Throughout the process, the merchant services retrieval chargeback department tracks deadlines and ensures the correct documentation is submitted, adhering to the card networks’ rules and regulations.
Chargeback Processing and Merchant Rights
If the issuing bank deems the merchant’s submitted evidence insufficient, they will initiate a chargeback. This means the funds for the disputed transaction are debited from the merchant’s account. The Retrieval Chargeback Department is then responsible for presenting the chargeback to the merchant, along with the reason code, and explaining the next steps. Merchants often have the right to either accept the chargeback or to “represent” the chargeback by providing more compelling evidence. The process for ‘representment’ is a critical step for merchants to pursue disputed chargebacks.
Ongoing Dispute Management
The Retrieval Chargeback Department’s work does not stop at the notification of a chargeback. If a merchant chooses to represent a chargeback, the department will meticulously review the rationale provided for the initial chargeback and work to provide further proof to the acquiring bank. This can involve additional documentation, witness statements, or even legal actions if warranted. Additionally, the department analyzes trends in chargebacks to identify potential issues in the merchant’s sales processes and helps to create a strategy to reduce future disputes and protect revenue, working continuously to minimize losses associated from chargebacks.
