E-Commerce Merchant Account Chargeback Requests

A chargeback, as previously stated, is the reversal of a portion, or the entire amount, of a card transaction that is being disputed, resulting in a refund to the issuer and debit to the e-commerce merchant account provider or the retailer in the amount listed to the dispute. Chargebacks can be initiated as a result of a processor's or retailer's failure to provide a complete and on-time response to a sales ticket retrieval request or for the failure of the retailer to follow applicable credit card processing procedures.

If the card issuer has sufficient evidence that supports a dispute of a transaction, the e-commerce merchant account provider will not require the submission of a ticket retrieval request prior to initiating a chargeback request. An image of the sales receipt supporting the chargeback request must be submitted to the processor within five business days of the issuer initiating it, except for disputes related to authorizations where the evidence is saved as an electronic record. The content of a processor's or retailer's response to a retrieval request may constitute sufficient evidence needed to resolve the dispute.

Each chargeback request needs to contain the following pieces of information:

• Details of any correspondence between the customer and the retailer documenting the authenticity of the chargeback request; or
• Sufficient evidence supporting the dispute.

Additionally required information regarding some types of transactions may include the following:

• For airline e-commerce merchant account transactions, the original ticket if a paper ticket was produced, a copy of the original ticket with adequate proof that the consumer did not use the ticket or evidence of the sale of an electronic ticket (such as the confirmation code);
• Assignment of claim by a consumer that received a refund; and
• Other documentation that may be requested by the processor.

Upon receiving the chargeback request from the issuer, each processor or retailer is required to repay the amount of the resulting Chargeback to the Association (Visa or MasterCard). If the evidence proves that the chargeback was indeed improper, they should request a re-presentment.

If Visa or MasterCard does not receive sufficient evidence supporting the chargeback request from the card issuer within the time-frame stated (five business days) or if the Association does receive a request that is not compliant with the above requirements, a chargeback may not be processed or if it had done so already, the Association may process a re-presentment.

(Learn more here.)