Chargebacks

This subsection provides answers to questions about working with chargebacks on financial operations. Some parts of the information here are general and applicable to chargebacks as a whole, but most parts of the information apply to payments in the context of which ecommpay acts as an acquirer and, in cases of chargebacks, interacts with issuers and card networks representing the merchant's interests. These payments are the ones processed with the use of the Mastercard and Visa cards in the scope of card payments and payments made via the Apple Pay and Google Pay payment methods.

A chargeback and a dispute—what do these terms mean?

Short answer: these are different options to define the regulated process of disputing a financial operation.

Figure 1. Detailed answer

A chargeback is a regulated process of disputing a financial operation in order to return its full or partial amount. Within the work with different card networks, this procedure can be defined by different terms: for example, the Mastercard global card network uses the term chargeback, while the Visa global card network refers to the procedure as a dispute. In the context of the ecommpay payment platform, the general term chargeback is used.

Chargebacks can be filed on the customers' or issuers' initiative to dispute separate operations that result in:

  • debiting of funds from the customers' accounts within purchases,
  • returning the funds after purchases,
  • crediting of funds within payouts.
Chargebacks can occur for various reasons, for example, when a customer is unhappy with the service quality or an issuer is unable to credit a customer's account for technical reasons.
Note: One of the chargeback reasons can be processing an operation with the authorisation declined by the issuer (here authorisation means the issuer's approval of processing a purchase or a payout with the use of a certain payment card). Within the ecommpay payment platform, unauthorised operations cannot be processed technically for the following reason: an authorisation request is automatically sent to the issuer's service upon the receipt of a payment request from the merchant's web service, and if the issuer declines to authorise the operation, the payment is also declined on the payment platform side. However, this does not eliminate the possibility of chargebacks related to the authorisation issues.

Chargebacks can affect the merchant's business reputation and lead to extra costs, thus it is important to respond to each chargeback quickly and resolve it in accordance with the card network rules. To ensure compliance with these conditions for its merchants, ecommpay is actively involved in managing chargebacks on operations in the context of which ecommpay acts as an acquirer. These operations are the ones processed with the use of the Mastercard and Visa cards in the scope of card payments and payments made via the Apple Pay and Google Pay payment methods. When chargebacks on such operations occur, ecommpay notifies the merchants about new chargeback information in a timely manner and, when necessary, creates response documents for challenging chargebacks based on the pieces of evidence provided by the merchants and according to the card networks rules, then sends these documents to the issuers and accompanies the process until its completion.

For more information about the chargeback process, see the answer to the corresponding question of this section—How is the chargeback process organised?

What should I do upon receiving a chargeback?

Short answer: upon receiving the chargeback information from ecommpay, the merchant should either accept or challenge the chargeback via the Dashboard interface within four business days following the day of the chargeback information receipt.

Figure 2. Detailed answer
What should be done. After the information about a new chargeback is received, the notification about it is displayed in the Dashboard interface and sent to the merchant via email. Depending on whether the merchant agrees or disagrees with the chargeback, the merchant can either accept or challenge it. If the chargeback is accepted, the chargeback process finishes in favour of the issuer. If the chargeback is challenged, the process continues until one of the parties accepts the liability or the card network arbitration committee makes a decision.
Note: In the Dashboard interface, chargebacks are grouped into cases according to the parameters Report date, Account number, and Reason code. This allows providing response to a separate chargeback or to several ones included in the case. In the chargeback information tab, the left panel contains the list of all chargebacks under the case, the two middle panels contain the information about the selected chargeback, and the right panel contains the details by which the chargebacks were grouped.

What should be considered. If the arbitration committee steps in, then, if the merchant loses or accepts the chargeback, the merchant is considered liable not only for the amount of the disputed operation but also for the fee amount charged by the card network. This is why, before Before challenging a chargeback, the merchant should ensure they have the necessary evidence for supporting their position and countering the chargeback. The information as to which documents may be required for challenging chargebacks in certain cases and recommendations for preparing such documents is provided in the chargeback information tabs of the Dashboard interface (on the panel for providing evidence) or can be requested from the ecommpay chargeback specialists via email (add your account manager as one of the recipients). Along with that, in certain cases, providing documents can be unnecessary: for example, if the chargeback reason concerns processing an operation without authorisation performed, specifying the authorisation code and date will suffice.

In case of chargebacks filed due to fraud issues and on operations that have not been refunded, arbitration committees can make their decisions based on the 3‑D Secure authentication result codes (for more information, see the Electronic Commerce Indicators referenceECIs): in such cases, if according to the code value, the merchant is the responsible party, the decision is usually made in favour of the issuer. Thus, before the merchant makes a decision on a chargeback, it is recommended to first check the ECI of the disputed operation.

When chargeback decisions should be made. The merchant should provide all decisions on the chargeback within the periods stipulated by ecommpay. The initial response to the chargeback should be provided within four business days following the day of the chargeback information receipt. For further responses, the response period can vary: in case of Visa and chargebacks related to the authorisation and fraud issues, the response period can be from one to two business days, while in other cases this period averages about four business days. If the merchant makes no action before the stipulated deadline, the chargeback process finishes in favour of the issuer or continues until the arbitration committee makes a decision (if the issuer has already submitted the chargeback to the committee).
Note: The information about the periods allocated for merchants to make decisions is provided in the chargeback information tabs of the Dashboard interface or—if upon coordination with ecommpay, the merchant does not use Dashboard accounts—in the notifications sent by the ecommpay specialists to the specified email address of the merchant.

How chargeback decisions should be communicated. Technically, a chargeback can be accepted or challenged via the Chargebacks section of the Dashboard interface (the following tools of the chargeback information tab can be used: Accept, for accepting the chargeback, and Submit Evidence, for challenging the chargeback) or, if for some reason the response cannot be provided via Dashboard, by contacting the ecommpay chargeback specialists (their email address is provided in the chargeback information tab or can be requested from your account manager).

How emerging questions should be addressed. If you have questions about working with chargebacks, contact the ecommpay account manager and chargeback specialists (adding your account manager as one of the recipients).

How is the chargeback process organised?

Short answer: each chargeback process is carried out in stages and according to one of the chargeback workflows, where ecommpay, as an acquirer, represents the merchant's interests interacting with the card network and the issuer.

Figure 3. Detailed answer

Overview

The following three parties are usually involved in the chargeback process—the issuer from the customer side, the card network as a regulatory body, and the acquirer or the merchant from the merchant side. ecommpay works with chargebacks on the operations in the context of which ecommpay acts as an acquirer. These operations are the ones processed with the use of the Mastercard and Visa cards in the scope of card payments and payments made via the Apple Pay and Google Pay payment methods. In cases of chargebacks on such operations, ecommpay, within the established timelines, interacts with all parties and, notifies the merchant about the issuer's and card network's decisions, while also ensuring the required flow of the merchant's funds. In other cases—regarding chargebacks on operations processed via the ecommpay payment platform by using cards of other card networks or via other alternative payment methods—the merchant works with chargebacks on their own.

Chargebacks on financial operations can be processed with regard to the transitions between different stages, and the number of the stages can vary depending on the card network, chargeback reason, and the decisions made by the parties. ecommpay uses four stages of the chargeback process—Chargeback, Representment, Pre-Arbitration (which includes the attempt and response steps), and Arbitration.

When the information about a new chargeback is received by ecommpay, this information is registered in the platform and becomes available via the Dashboard (in the Chargebacks section) and Data API (details) interfaces with the automatic notification sent to the specified email addresses of the Dashboard accounts (for which the Receive e-mails about chargebacks function is enabled in the user profiles). At the same time, the first chargeback stage—Chargeback—opens.
Note: If, as agreed with ecommpay, the merchant does not use any Dashboard account, the notification about a new chargeback is sent to the specified email address of the merchant, and this notification contains the file with full chargeback information.
After reviewing the chargeback information, the merchant can accept or challenge the chargeback. If the chargeback is accepted, the chargeback process finishes in favour of the issuer; if the chargeback is challenged, the chargeback process continues until one of the parties makes a final decision.
Notice: If chargebacks on refunds and chargebacks on payouts occur, it is recommended to accept such chargebacks, since they are usually filed due to the issuers' inability to credit the funds to the customers' accounts and challenging these chargebacks does not solve this problem. Upon receiving chargebacks on refunds and payouts, the merchant can contact the customers and suggest that they address the issuers to identify the reasons why the funds are not credited to their accounts and to find the possibilities of retrying crediting of funds. If there are no such possibilities on the issuers' side, it is recommended to find other ways of transferring the funds to the customers.

At the Representment and Pre-Arbitration stages, the parties exchange additional details, consider each other's arguments, and try to find an agreed solution. If the parties do not reach a mutual solution, at the final stage of the chargeback process—Arbitration—the arbitration committee steps in. In this case, the party that loses the chargeback by the committee's decision is held responsible for paying not only the disputed amount but also the card network fee.

Chargeback workflows

Within the interaction with separate card networks, the chargeback process can be organised in different ways. For this, For working with chargeback, ecommpay uses one full and two shortened workflows.

The full workflow includes all chargeback stages and is used in the following cases:

  • For Mastercard chargebacks, except the ones managed within the short workflow.
  • For Visa chargebacks that occur due to operation processing errors or consumer disputes (which cover such issues as goods and service quality or crediting of funds to the customer's account).

The shortened workflows, depending on a card network, do not include certain stages and are used in the following cases:

  • For Mastercard chargebacks due to authorisation issues, when the issuer submits the chargeback for the arbitration committee review following the results of the Representment stage. In this case, the Pre-Arbitration stage is not initiated.
  • For Visa chargebacks that occur due to authorisation issues or fraud. In this case, the Representment stage is not initiated and the initial response to the chargeback with the merchant's evidence is provided at the Pre-Arbitration stage.

Considering these special aspects, the chargeback process workflows in the ecommpay payment platform can be illustrated as follows.



Full workflow


Shortened Mastercard workflow


Shortened Visa workflow

Chargeback stages

Overview

Each stage of the chargeback process is initiated and managed in a certain way. Depending on a stage and its outcome, different situations can occur. The following paragraphs describe such situations and provide information about the changes of chargeback status and the merchant's balance (in case of chargebacks on refunds and payouts, the merchant's balance changes in reverse).

Chargeback

The Chargeback stage is initiated by the issuer and the responsibility for responding at this stage lies on the merchant (excluding the situation when the issuer withdraws the chargeback). At this stage, the merchant should provide ecommpay with the decision on the chargeback no later than four business days following the day of the chargeback information receipt. Along with that, depending on the situation and evidence at hand, the merchant can dispute the initial amount of the chargeback fully or partially.

Generally, at the Chargeback stage, the following situations can occur.

Situation Status

The chargeback information has been received by ecommpay and sent to the merchant. The response is awaited—the merchant can either accept or challenge the chargeback.
The merchant's balance decreases by the initial amount of the chargeback. Along with that, the merchant can be charged a fee of ecommpay.

Needs response

The chargeback has been accepted by the merchant because the merchant either has decided to accept it or has not responded to it within the stipulated period (in the latter case, the expired marker is used next to the status). The chargeback process is completed in favour of the issuer.
The merchant's balance remains unchanged.

Accepted by merchant

The chargeback has been withdrawn by the issuer. The chargeback process is completed in favour of the merchant.
The merchant's balance increases by the initial amount of the chargeback.

Cancelled by issuer

The chargeback has been disputed by the merchant. ecommpay initiates the next stage.
The merchant's balance remains unchanged.

In progress

Representment

Within the full (Mastercard and Visa) workflow and the short Mastercard workflow, the Representment stage is initiated by ecommpay and the responsibility for responding at this stage lies on the issuer. Within the short Visa workflow, this stage is never initiated and the chargeback is first challenged at the Pre-Arbitration stage. At the Representment stage, ecommpay, via the card network, sends the merchant's evidence to the issuer and the merchant should wait for the information about the issuer's decision.

At the Representment stage, the following situations can occur.

Situation Status

The chargeback has been challenged (fully or partially) and the merchant's evidence has been provided. The issuer's response is awaited—the issuer can either accept the evidence or continue the chargeback process.
The merchant's balance remains unchanged.

In progress

The merchant's evidence provided for partially challenging the chargeback has been accepted by the issuer. The chargeback process is completed partially in favour of the merchant and partially in favour of the issuer.
The merchant's balance increases by a part of the initial amount of the chargeback, since the merchant was charged the total initial amount of the chargeback at the Chargeback stage.

Partially won

The merchant's evidence has been accepted by the issuer. The chargeback process is completed in favour of the merchant.
The merchant's balance increases by the initial amount of the chargeback.

Won

The merchant's evidence has not been accepted by the issuer or has been accepted only partially. The issuer initiates the next stage.
The merchant's balance remains unchanged

In progress

Pre-Arbitration

The Pre-Arbitration stage consists of the two steps: attempt and response at which ecommpay and the issuer inform each other about the decisions on the chargeback in the order that depends on the chargeback workflow. Along with that, the amount being disputed can be decreased by the issuer if they accept only a piece of the merchant's evidence.

Within the full workflow, the Pre-Arbitration attempt is initiated by the issuer (if the issuer did not accept the merchant's evidence at the Representment stage) and the responsibility for making a decision at the Pre-Arbitration response step lies on the merchant. In this case,Within the full workflow, the Pre-Arbitration stage is initiated by the issuer and the merchant should notify ecommpay about their decision on the chargeback within the stipulated period which on average can be about four business days following the day when the merchant is notified about the attempt step initiation.

Within the short Mastercard workflow, this stage is never initiated, since the issuer decides to submit the chargeback to the arbitration committee as a result of the Representment stage.

Within the short Visa workflow, the Pre-Arbitration attempt step is initiated by ecommpay and the responsibility for making decisions at the Pre-Arbitration response step lies on both the issuer and the merchant. In this case,Within the short Visa workflow, the Pre-Arbitration stage is initiated by ecommpay and if the issuer has not accepted the merchant's evidence at the Pre-Arbitration response step, the merchant should notify ecommpay about their decision on further actions—either to accept the chargeback or to submit it to the arbitration committee of the card network. As a rule, the decision should be provided within the stipulated period which can be from one to two business days following the day when the merchant is notified about the issuer's decision.
Note: The information about the periods allocated for merchants to make decisions is provided in the chargeback information tabs of the Dashboard interface or—if upon coordination with ecommpay, the merchant does not use Dashboard accounts—in the notifications sent by the ecommpay specialists to the specified email address of the merchant.

Within the full workflow, at the Pre-Arbitration stage, the following situations can occur.

Full workflow. Situation Status
Pre-Arbitration attempt

The evidence provided at the Representment stage, has not been accepted by the issuer or has been accepted only partially. The information about it has been sent to the merchant. The response is awaited—the merchant can either accept or challenge the chargeback.
The merchant's balance remains unchanged

In progress
Pre-Arbitration response

The merchant's response has been received (or the period allocated for providing the response has expired and the chargeback becomes accepted).
The merchant's balance remains unchanged.

In progress

The chargeback has been accepted by the merchant. The chargeback process is completed in favour of the issuer.
The merchant's balance remains unchanged, since the merchant was already charged the amount of the disputed operation at the Chargeback stage.

Accepted by merchant

The chargeback has been challenged by the merchant. The issuer's response is awaited—the issuer can either accept the evidence or submit the chargeback to the arbitration committee of the card network.
The merchant's balance remains unchanged.

In progress

The merchant's evidence has been partially accepted by the issuer and the merchant has agreed with this decision. The chargeback process is completed partially in favour of the merchant and partially in favour of the issuer.
The merchant's balance increases by a part of the disputed amount, since the merchant was charged the initial amount of the chargeback at the Chargeback stage.

Partially won

The chargeback has been challenged by the merchant and the evidence has been accepted by the issuer. The chargeback process is completed in favour of the merchant.
The merchant's balance increases by the amount of the disputed operation.

Won

The chargeback has been challenged by the merchant and the evidence has not been accepted by the issuer. The submission of the chargeback to the card network arbitration committee is awaited (this submission is performed by the issuer).
The merchant's balance remains unchanged.

In progress

Within the short Visa workflow, at the Pre-Arbitration stage, the following situations can occur.

Short Visa workflow. Situation Status
Pre-Arbitration attempt

The chargeback has been challenged and the merchant's evidence has been provided. The issuer's response is awaited—the issuer can either accept the evidence or continue the chargeback process.
The merchant's balance remains unchanged.

In progress
Pre-Arbitration response

The issuer's response has been received.
The merchant's balance remains unchanged.

In progress

The merchant's evidence has been partially accepted by the issuer and the merchant has agreed with this decision. The chargeback process is completed partially in favour of the merchant and partially in favour of the issuer.
The merchant's balance increases by a part of the disputed amount, since the merchant was charged the initial amount of the chargeback at the Chargeback stage.

Partially won

The evidence has been accepted by the issuer. The chargeback process is completed in favour of the merchant.
The merchant's balance increases by the initial amount of the chargeback.

Won

The evidence has not been accepted by the issuer. The merchant's response is awaited—the merchant can decide either to accept the chargeback or to submit it to the arbitration committee.
The merchant's balance remains unchanged.

In progress

The chargeback has been accepted by the merchant or the merchant has not provided the response within the stipulated period. The chargeback process is completed in favour of the issuer.
The merchant's balance remains unchanged, since the merchant was already charged the initial amount of the chargeback at the Chargeback stage.

Accepted by merchant

The chargeback is challenged by the merchant. The submission of the chargeback to the card network arbitration committee is awaited (this submission is performed by ecommpay).
The merchant's balance remains unchanged.

In progress

Arbitration

Within the full (Mastercard and Visa) workflow and the short Mastercard workflow, the Arbitration stage is initiated by the issuer (in this case, the ecommpay chargeback specialists inform the merchant that this stage has been initiated), while within the short Visa workflow, the Arbitration stage is initiated by ecommpay upon coordination with the merchant. The responsibility for making a decision at this stage lies on the card network arbitration committee. At this stage, the merchant should wait for the decision of the arbitration committee.

The arbitration committee starts the chargeback consideration after the preparatory period expires—this period is seven and ten calendar days in case of Visa and Mastercard accordingly. Within this period and until the arbitration committee rules on the case, the merchant can ask ecommpay to withdraw the chargeback. The merchant, however, should bear in mind that this withdrawal leads to the acceptance of the chargeback and the card network fee charges applied for losing the chargeback. At the same time, before the final decision is made, the issuer can also terminate the chargeback process by accepting the provided evidence.

When examining the chargeback, the arbitration committee considers only the amount of the chargeback that remains unresolved between the merchant and the issuer at the Arbitration stage. For example, if the initial disputed amount of 900 USD was decreased to 600 USD on the merchant's or the issuer's initiative in the course of the dispute, then at the Arbitration stage, the amount of 600 USD will be considered and reimbursed in favour of one of the parties or divided between them by the decision of the card network's arbitration committee.

As a result of the Arbitration stage, the merchant can be charged the card network fees in the following cases:

  • If ecommpay withdraws the chargeback on the merchant's request.
  • If the decision is made in favour of the issuer (even partially).
  • If violations on the merchant side are detected (such violations can be, in particular, the violations of the card network rules regarding the usage of the customer payment credentials).
Note: For more information about the fees charged by the card networks in certain cases and possible violations for which fees are applied, contact the ecommpay chargeback specialists via email (by adding your account manager as one of the recipients). The email address of the chargeback specialists is provided in the chargeback information tabs of the Dashboard interface.

In general, at the Arbitration stage, the following situations can occur.

Situation Status

The arbitration committee's decision is awaited. At the same time, the chargeback can be withdrawn on the merchant's or the issuer's request before the committee makes a decision.
The merchant's balance remains unchanged.

In progress

The chargeback has been withdrawn on the merchant's request before the arbitration committee rules on it. The chargeback process is completed in favour of the issuer.
The merchant's balance decreases by the amount of the card network fee, since the merchant was already charged the initial amount of the chargeback at the Chargeback stage.

Accepted by merchant

By the arbitration committee's decision, the chargeback process has been completed in favour of the issuer.The arbitration committee has made the decision in favour of the issuer.
The merchant's balance decreases by the amount of the card network fee, since the merchant was already charged the initial amount of the chargeback at the Chargeback stage.

Lost

By the arbitration committee's decision, the chargeback process has been completed partially in favour of the merchant and partially in favour of the issuer.The arbitration committee has made the decision partially in favour of the merchant and partially in favour of the issuer.
The merchant's balance increases by a part of the disputed amount and can also decrease by the full or a partial amount of the card network fee, since the merchant was charged the total disputed amount at the Chargeback stage. Along with that, the amount of the card network fee, depending on the arbitration committee's decision, can be charged either to one of the parties or divided between them.

Partially won

The chargeback has been withdrawn on the issuer's request or the arbitration committee has made the decision in favour of the merchant, by the arbitration committee's decision, the chargeback process has been completed in favour of the merchant.
The merchant's balance increases by the disputed amount.

Won

How can I check the chargeback status?

Short answer: information about chargebacks that are processed with ecommpay involved can be obtained via the Dashboard and Data API interfaces, and, in certain cases, via email.

Figure 4. Detailed answer

Relevant information about chargebacks, as well as about the chargeback statuses, can be obtained via Dashboard (by using the Chargebacks and Reports sections) and the Data API (details).

Additionally, the chargeback information can be sent by the ecommpay specialists to the specified email address of the merchant in the following cases:

  • When the merchant, upon coordination with ecommpay, does not use Dashboard accounts.
  • When the chargeback is submitted to the arbitration committee.
  • When the chargeback process is completed because the arbitration committee has made the decision in favour of the issuer (fully or partially).

The following statuses are assigned to the chargebacks in the ecommpay payment platform.

Needs response Intermediate status. The merchant's response to the chargeback is awaited.
In progress Intermediate status. The work with the chargeback is in process, the final decision has not been made yet.
Accepted by merchant (expired) Final status. The merchant has not responded within a stipulated period. The chargeback process is completed in favour of the issuer.
Accepted by merchant Final status. The merchant has accepted the chargeback. The chargeback process is completed in favour of the issuer.
Lost Final status. The arbitration committee has made the decision in favour of the issuer. The chargeback process is completed in favour of the issuer.
Partially won

Final status. The chargeback process is completed partially in favour of the merchant and partially in favour of the issuer for one of the following reasons:

◆ The merchant has challenged a part of the initial chargeback amount and the issuer has accepted the merchant's evidence.
◆ The merchant's evidence provided for challenging the initial chargeback amount has been partially accepted by the issuer and the merchant agreed with this decision.
◆ The arbitration committee has made the decision partially in favour of each party.

Won Final status. The issuer has accepted the evidence or the arbitration committee has made the decision in favour of the merchant. The chargeback process is completed in favour of the merchant.
Cancelled by issuer Final status. The issuer has withdrawn the chargeback. The chargeback process is completed in favour of the merchant.

What is a chargeback reversal?

Short answer: this term refers to the situations when the issuer withdraws the chargeback.

Figure 5. Detailed answer

A chargeback reversal is a chargeback withdrawal initiated by the issuer before the merchant provides the initial response to this chargeback. As a result of such withdrawal, the merchant's balance increases (if the chargeback was filed on a purchase) or decreases (if the chargeback was files on a refund or a payout) by the initial chargeback amount and the chargeback gets the Cancelled by issuer status. The merchant is not required to respond to the chargeback in this case.

A chargeback on refund and a chargeback on payout—what do these terms mean?

Short answer: these terms refer to the chargebacks filed on the operations of refunds and payouts.

Figure 6. Detailed answer

A chargeback on refund and a chargeback on payout refer to the procedures of disputing a refund and a payout accordingly. These chargebacks are filed by issuers when the issuers are not able to credit funds to the cardholders' accounts (for example, due to these accounts' closure or region-specific requirements). As a result of such chargebacks, the funds that were previously taken from the merchant within refunds and payouts are returned to the merchant.

Since the reasons for such chargebacks are defined only on the issuers' side, the merchants cannot prevent these situations. The merchants cannot prevent such situations but can contact the customers and suggest that they address the issuers to identify the reason why the funds are not credited to their accounts and to find the opportunities of retrying the crediting of funds. However, in such cases, the merchant can contact the customers and suggest that they address the issuers to identify the reason why the funds are not credited to their accounts and to find the opportunities of retrying the crediting of funds. If there are no such opportunities on the issuers' side, it is recommended to find other ways of transferring the funds to the customers.

Is it possible to prevent a chargeback on a purchase by refunding the purchase and why the issuers can file chargebacks even after refunds?

Short answer: refunds do help prevent chargebacks but not to the full extent, since, in some cases, the issuers can have reasons to dispute purchases even after these purchases have been refunded.

Figure 7. Detailed answer

Promptly returning the funds to the customer when an unreasonable withdrawal is detected (for example, when the customer complains they have not received the goods or services they paid for) can help to prevent a disputable situation but still does not eliminate the possibility of a chargeback. If, regardless of a refund, the issuer has filed a chargeback on a purchase, the evidence that the refund was made can be used by the merchant for challenging the chargeback. This increases the merchant's chance of winning the chargeback, although it does not guarantee it.

An issuer can file a chargeback for a payment that has been already refunded for different reasons, including the following ones:

  • The funds have not been credited to the cardholder's account yet and the issuer does not know about the initiated refund.
    After a refund, the funds should be credited to the cardholder's account within a period stipulated by the card network (usually this period is up to 15 calendar days). However, the customer can address a claim to the issuer before the funds are returned and the issuer can file a chargeback due to the absence of the refund information.

  • The correlation between the operation and refund could not been found.
    The issuer can check the cardholder's account information and not match the refund with the purchase for one of the following reasons:

    • Several purchases with different amounts were processed and a refund was made for one of these purchases.
    • The amount of the purchase does not match that of the refund due to different exchange rates on the date of payment processing and the date of refund processing.
    • The issuer has decided the refund is not related to the disputed operation. In this case, the issuer should explain the reasons for this decision.

In order to prevent such situations, it is important to inform customers about the payment status, refund policy and timelines. If the chargeback was filed regardless of the previously made refund, it is recommended to respond to the chargeback providing ecommpay with the evidence of the refund. For additional consultations on steps that can be taken in such cases, contact the account manager or chargeback specialists of ecommpay. (The email address of the chargeback specialists can be found in the chargeback information tabs of the Dashboard interface or requested from your account manager. When contacting the chargeback specialists, specify the account manager as one of the recipients.)

Should I make a refund for the operation being disputed?

Short answer: it is not recommended to refund an operation that is being disputed.

Figure 8. Detailed answer

Generally, after a chargeback has been filed on a purchase, it is not recommended to refund this purchase for the following reason. After the information about a new chargeback has been received by ecommpay, regardless of the merchant's decision (to accept or challenge this chargeback), the merchant's balance decreases by the initial chargeback amount and this amount is returned to the issuer, and then (if the issuer wins the chargeback) to the customer. Thus, if the merchant attempts to make a refund for the disputed operation, this refund is declined automatically on the platform side—in order to avoid double return of funds.

With that, If despite the risk of double return of funds, the merchant still has questions about refunds for a disputed operation, these questions can be directed to the ecommpay account manager.