Fighting chargebacks can be a major hassle for merchants. The entire process is complicated, costly and time consuming.
If you lost a chargeback dispute you thought you should have won, you might be feeling even more frustrated with the experience. After all, you’ve invested a lot of energy in fighting the chargeback to no avail. Feeling discouraged, many merchants will accept the resolution, try to learn from the process and move forward. But this isn’t necessarily the path you have to follow.
Even though a vast majority of chargebacks are resolved with the initial decision, if you truly feel you were entitled a reversal and have the proper evidence to support your claim, you do have another chance to make things right. As a last resort for merchants determined to fight a chargeback, there is arbitration. Arbitration gives you another chance to argue for your case and settle the dispute. Although it is also a difficult process that will require even more of your time and resources, it could be the solution you’re looking for.
Pursuing arbitration means an arbitrator will help you settle a dispute outside of the traditional channels. In essence, arbitration gives you another opportunity to defend yourself. Every card provider has its own sets of arbitration guidelines, so it will be important to do some research before initiating the process.
Like chargeback disputes, arbitration comes with strict time limits. In most cases, it must be sought within 45-60 days. Usually, to move forward with arbitration, all phases of the chargeback process must be completed before merchants can move forward with their request. Also similar to the chargeback representment process, arbitration can be costly. With filing fees, administration fees, withdrawal fees and technical fees, merchants are looking at spending a lot of money upfront just to file their request for arbitration. Different card providers will have different arbitration requirements.
In some cases, you will have to complete the pre-arbitration phases before they can advance to the next phase. If your request is deemed invalid, your case for arbitration will be rejected. If you do move onto arbitration and you are still found liable, Visa gives you the right to appeal the decision if new evidence that was not previously available emerges, or if the disputed amount is $5,000 or greater.
Unfortunately, you must be prepared for the possibility that you will go through the entire arbitration process and lose your case again. To prevent this from happening, be sure to put your best efforts forth when submitting chargeback disputes. Make sure to provide compelling evidence that addresses the chargeback reason code and compose a strong rebuttal letter to help your case. Making the strongest argument possible in the first place will help you avoid the time-consuming arbitration process.
Remember, you always have the right to defend yourself. But it’s still important to take time to consider whether you have a high chance of winning your case before fighting a chargeback a second time by pursuing arbitration