program: Chargeback Handling
- authority: Mastercard SPME §10.1 and §11.5
+ authority: Mastercard SPME §10.1, §10.3, §10.4, and §11.5
acknowledgement_business_days: 1
lifecycle_states:
  - first_presentment
  - chargeback
  - second_presentment
  - pre_arbitration
  - arbitration
evidence_requirements:
  first_presentment:
    - transaction_receipt
    - authorization_record
  chargeback:
    - merchant_rebuttal_letter
    - delivery_confirmation
    - customer_communication
  second_presentment:
    - compelling_evidence
    - signed_cardholder_agreement
  pre_arbitration:
    - full_dispute_record
    - prior_correspondence
  arbitration:
    - full_dispute_record
    - arbitration_filing
agent_owner: chargeback_agent
 
- # Updated to reflect refined definitions and thresholds relating to laundering, excessive chargebacks, fraudulent transactions, and bankruptcy as defined in Mastercard SPME §11.5 (2023 edition).
- # These criteria impact evaluation triggers and risk assessment during chargeback handling.
+ # Added explicit reference to ongoing customer submission responsibilities during investigations and appeals
+ # per Mastercard SPME §10.7 update, incorporating continuing obligations under sections 10.3 and 10.4.

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, as the acquirer, manages the entire dispute lifecycle for its merchants, from initial first presentment through arbitration, in compliance with Mastercard's requirements.

Lifecycle overview

Disputes move through defined stages: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Adherence to strict evidence requirements and deadlines at each stage is critical to avoid automatic rulings against the acquirer.

Required actions

1. Acknowledge each incoming chargeback within one business day.

2. Collect the necessary evidence based on the current lifecycle stage.

3. Submit second presentments when merchant liability is disputable, providing strong supporting evidence.

4. Only escalate to pre-arbitration and arbitration after issuer rejection of the second presentment.

5. Maintain full case documentation for audits and reporting.

6. Continuously provide required documentation and information to Mastercard throughout any investigation or appeal process as mandated by sections 10.3 and 10.4 of the Mastercard SPME.

## Monitoring and Risk Factors

Halyard Pay monitors merchant risk factors including chargeback ratios, fraud rates, and financial stability. Updated Mastercard MATCH Listing Reason Codes define specific grounds for elevated scrutiny or match listing, including but not limited to laundering (presentation of invalid transaction records), excessive chargebacks (over 1% chargeback-to-sales ratio with minimum USD 5,000 monthly), excessive fraud (fraud-to-sales ratio of 8% or more including at least 10 fraudulent transactions totaling USD 5,000 or more), questionable merchant classification, and bankruptcy.

These refined definitions inform Halyard Pay's chargeback and risk management policies to ensure compliance and mitigate risk exposure.

Source authority: Mastercard SPME §§10.1, 10.3, 10.4, 10.7, 11.5.

program: Refund Policy
- authority: Mastercard SPME §10.4
+ authority: Mastercard SPME 7 10.4, 10.7
refund_window_days: 30
partial_refund_allowed: true
notification_required_to_cardholder: true
notification_channels:
  - email
  - in_app
record_retention_months: 18
non_returnable_goods_refund_exception: false
agent_owner: refunds_agent
+ 
+ # Updated to reflect Mastercard's continued obligations for customers to submit information during investigations and the appeal process requirements under SPME 7 10.7

Refund Policy

Merchants processing transactions on the Mastercard network must maintain and honor ¶ a clearly defined refund policy. Halyard Pay requires that merchants to process refunds ¶ within 30 days of a valid refund request and that notify cardholders are notified when a ¶ refund has been refunds are initiated or declined.

When this policy applies

This policy applies to all transaction types where a cardholder requests a refund ¶ directly from the merchant, as distinct from a chargeback dispute disputes initiated through ¶ the card network. Merchants must not require cardholders to return goods before ¶ issuing a refund when the goods are non-returnable by nature.

Required actions

1. Accept refund requests within the 30-day window 30 days following the original transaction.

2. Partial refunds are permissible where a portion of the goods or services is ¶ non-defective.

3. Notify the cardholder cardholders in writing (email or in-app notification) when the refund ¶ is refunds are processed or when a refund request is declined.

4. Retain refund transaction records for a minimum of 18 months.

5. Submit to Mastercard ongoing documentation as required during investigations related to refunds or financial responsibility determinations, per Mastercard SPME sections 10.3 and 10.4.

Merchants must cooperate fully with Mastercard’s investigation process and understand that failure to provide requested information may limit their ability to appeal determinations regarding financial responsibility. Appeals must be timely, specify the basis for contention, and adhere to Mastercard’s standards; a non-refundable USD 500 fee applies to review appeals.

Source authority: Mastercard SPME §10.4.§10.4 and §10.7.