When a chargeback occurs, your practice must act promptly and follow the proper steps to resolve the dispute in your favor. Below is an overview of the MasterCard Dispute Process and the actions required at each stage.
1. Notification of Chargeback (NoC)
What Happens: You will receive a notification that a chargeback has been initiated.
Action Required: Prepare and submit defense documents to contest the chargeback, or accept the dispute.
Key Point: The chargeback amount is usually debited from your account a few days after receiving the NoC.
2. First Chargeback
What Happens: The disputed amount is withdrawn from your account.
Action Required: Upload defense documents within 40 days, or accept the chargeback.
Key Point: This is the final step if you either accept the chargeback or fail to upload defense documents within the specified time.
3. Information Supplied
What Happens: PbN forwards your defense documents to MasterCard.
Key Point: Once the documents have been submitted, no further modifications can be made.
4. Chargeback Reversed
What Happens: The disputed amount is temporarily credited back to your account while the issuer reviews your defense.
Key Point: If the issuer accepts your defense, the chargeback is resolved in your favor at this stage.
5. Pre-Arbitration
What Happens: If the issuer rejects your defense, a second chargeback will be initiated, and the issuer will file a Pre-Arbitration case within 45 days of the defense submission date.
Key Point: There is no option to escalate the case to arbitration after this stage.
6. Pre-Arbitration Outcome
Pre-Arbitration Won: If your defense is accepted by the issuer, the chargeback is resolved in your favor.
Pre-Arbitration Lost: If your defense is rejected, a second chargeback is processed, and there is no further option for arbitration.
7. Second Chargeback
What Happens: A second chargeback is finalized if your defense is declined.
Key Point: This marks the conclusion of the dispute process, with no further recourse through MasterCard.
Submitting Defense Documents: File Formats and Requirements
Ensure your documents meet the following guidelines to prevent delays in processing your defense:
File Formats:
JPG and TIFF (Max size: 10 MB per file)
PDF (Max size: 2 MB per file)
Specific Requirements:
For MasterCard disputes, defense documents can contain a maximum of 19 pages.
Essential Documents for a Strong Dispute Defense
Depending on the reason for the chargeback, ensure you submit the following documentation:
General
Copy of the invoice
Description of goods/services provided
Proof that any credits or reversals were not addressed by the issuer
Evidence that the cardholder used the service and did not cancel in compliance with your policies
Screenshots of terms and conditions the cardholder agreed to at purchase
Already Paid
Proof that the cardholder has not yet paid you
Confirmation of any refunds issued directly to the cardholder
Email communication or agreements stating the payment status
Canceled Services
Proof that the cardholder was informed of your cancellation policy and agreed to it at the time of purchase
Evidence that services were used between the billing and cancellation dates
Documentation showing a request for cancellation at a different date and that services were provided until then
Proof that the cardholder did not contact you to resolve the issue (e.g., email or phone logs)
Canceled Transaction
Invoice and description of services rendered
Confirmation email sent to the cardholder
Documentation proving the service was provided (e.g., email or invoice)
Dates showing when the cardholder began using the service
Record of previous, non-disputed payments
Verification details like CVV/CVC check, IP address, or device ID linked to the cardholder’s billing information
Canceled Recurring Transaction
Proof that the cardholder agreed to your cancellation or return policy at purchase
Evidence that services were used between the billing and cancellation dates
Documentation showing that the cardholder requested cancellation for a different date
Proof that the cardholder remained interested in the service
Records proving the cardholder did not attempt to resolve the issue