The card networks are the final authority on chargebacks. All rules, reason codes and phases of the chargeback process are designed by the Card Marks, and when banks cannot agree on an outcome, the Card Marks are the final arbiter.
On the surface, chargebacks look largely the same no matter which Card Brand you are dealing with, but each has different regulations and time limits. To manage your chargebacks effectively, you must know how to play by the rules of each Brand. That's why it's important to understand what the workflows are like for each Brand, as that will determine how and under what media a chargeback can be represented.
Card claim resolution is a detailed framework for the management of chargebacks and disputes, which is divided into two different workflows and steps. When a shopper files a claim or initiates a dispute, the issuing bank through the Brand Resolution System determines the validity of the chargeback, where the following may occur:
- If the claim is valid, the issuing bank will assign the chargeback category. Depending on the assigned category, there will be a different workflow (Assignment - Collaboration).
- If the claim is not valid (because there is a previous chargeback, or because the claim time has passed), the claim does not progress.
You are assigned for fraud and authorization disputes.
All fraud and authorization chargebacks go through the Assignment workflow. The card brand will perform a series of automated checks. These checks will tell the brand a few things:
- Is the fraud dispute based on 3D secure authorized transactions?
- Did the cardholder dispute the purchase after the allotted time frame?
- Has the cardholder already received a refund of the disputed charge?
The dispute will be blocked if the brand detects any of these items and will not be converted to a chargeback.
The allocation workflow will result in fewer invalid chargebacks.
Chargebacks that are assigned to the Assignment workflow go directly to the Arbitration phase, leaving the possibility that merchants can defend themselves in specific circumstances. But that will require clear and convincing evidence to refute a chargeback.
Assigned primarily for processing errors and consumer disputes.
Most disputes will go through the assignment workflow. But some will require interaction between merchants, acquirers and issuers. That's when the collaboration workflow comes into play. Basically, it follows the same flow as detailed in the phases of a chargeback. But its goal is to simplify communication between each party, and that will reduce the overall chargeback time.