There are six different chargeback types which may have different statuses which merchant may receive during the lifecycle of one transaction. To clarify it a bit we maid the guide for types and statuses of chargeback.
There are 6 types of chargebacks:
- Retrieval request - is an inquiry initiated by a Cardholder directly to their Issuing Bank. This could be the first step in the chargeback process or the cardholder is questioning the transaction and/or requesting more information.
- First chargeback -a reversal of a credit card sale disputed by the Cardholder or Issuer Bank. Chargeback fee is applied.
- Second/third chargeback - Sent by issuing bank if 2nd presentment is rejected by the cardholder. Chargeback fee is applied.
- Representment - the merchant gathers evidence supporting the belief that the transaction was authorized and carried out according to the agreed-upon terms, then represents the transaction with the acquirer’s assistance. Chargeback fee is not applied. Additional fee may be applied for the representment procedure.
- Chargeback reversal - if the issuer feels the merchant has adequately disproved the cardholder’s claim, the chargeback will be reversed. Chargeback fee is not applied.
- Lost representment - if the merchant wasn’t able to contradict the cardholder, the representment will be considered as lost and the transaction amount will be permanently removed from the merchant's account. Chargeback fee is not applied.
First and Second/third chargebacks can have the following statuses:
- opened - chargeback was received
- represented - representment was received
- reversed - chargeback reversal was received
- closed- lost representment was received
Merchant should accept chargeback if:
- The customer is correct.
- You accept liability.
- Transaction should have been refunded.
- Challenging the chargeback is not worth the consequent expense.
Merchant should challenge the chargeback if:
- You dispute the customer's claim and you have evidence to support your case.
- Evidence includes proof that the service was provided and/or the correct merchandise was delivered.
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