A chargeback is a type of transaction dispute where a cardholder contacts their card issuer
and requests their money back for an item or service purchased by using their card. The
cardholder can only dispute a charge on their account and request a chargeback where they
have a valid reason. For example:
- Goods or services not received
- Goods or services received not as advertised, faulty or of an unsatisfactory quality
- The amount charged is incorrect
- Fraudulent transaction – the cardholder did not make the transaction and their card details were obtained fraudulently
In all instances, the cardholder should first contact the merchant to attempt to resolve their issue; for example, by asking the merchant to issue a refund or resend a replacement item. Where the customer and merchant cannot agree on a resolution, the cardholder has the right to contact their card issuer and ask them to raise a chargeback.
The card schemes (i.e. Visa and Mastercard; also known as card networks) provide rules and
processes, as well as systems to handle chargebacks. You can find out more about their
rules in the:
- Mastercard Chargeback Guide
- Visa Chargeback Guidelines for Merchants (see Section 5 for issuer guidelines)
As a Program Manager or card issuer, your cardholders should have a means to contact you directly to raise disputes about a transaction on their account. This is typically via a call centre number printed on their card or advertised on your website.
When a cardholder queries a transaction, you can use the Thredd Smart Client application to view details of the transaction. Smart Client also provides a facility to enable you to raise and manage chargebacks (Note that this is only available for Mastercard issuers in Europe/UK at present).
Chargebacks are also supported via the relevant card scheme (i.e. Mastercard or Visa), which provide online systems where issuers and acquirers can view and respond to chargeback notifications.
If you are a card issuer, you will be able to respond directly to the card schemes. However, most Thredd clients are Program Managers who use an existing card issuer to provide their card service and, in this case, Thredd can mediate on your behalf with your issuer’s permission.
Some issuers manage all chargebacks for their Program Manager clients, while others want their clients to raise their chargebacks directly with us and have enabled our Mastercom API to facilitate this. If you are a Program Manager, you will not have a direct relationship with the card scheme and you will need your issuer or Thredd to provide you with information to help you manage your chargebacks.
For more information on chargebacks, refer to the Payments Dispute Management Guide.
Updated 6 months ago