program: Chargeback Handling
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
    - fraud_and_chargeback_data_analysis
  second_presentment:
    - compelling_evidence
    - signed_cardholder_agreement
  pre_arbitration:
    - full_dispute_record
    - prior_correspondence
  arbitration:
    - full_dispute_record
    - arbitration_filing
agent_owner: chargeback_agent
 
- # Added evidence requirement for fraud and chargeback data analysis to address new MATCH reason codes
- # related to excessive chargebacks and fraud ratios as introduced in Mastercard SPME §11.5 update,
- # supporting compliance with chargeback management standards per Mastercard SPME §10.1 and §10.3.
+ # Note: Removed references to merchant cooperation requirements for ADC Event investigations and remediation as these have been eliminated in Mastercard SPME §10.3.2, reflecting current obligations in chargeback handling processes.

Chargeback Handling

Chargebacks are cardholder-initiated disputes against a transaction. Halyard Pay, acting as the acquirer, manages disputes from initial presentment through potential arbitration, adhering to Mastercard's requirements to protect all parties involved.

Lifecycle overview

Disputes progress through defined phases: first presentment, chargeback, second presentment (re-presentment), pre-arbitration, and arbitration. Compliance with evidence standards and timelines at each step is essential to prevent adverse rulings.

Required actions

1. Acknowledge incoming chargebacks within one business day.

2. Gather necessary evidence relevant to the dispute stage.

3. Submit second presentments when liability is disputable, supported by strong documentation.

4. Escalate to pre-arbitration and arbitration only after issuer rejection of second presentment.

5. Retain comprehensive case documentation for auditing and reporting purposes.

6. Provide all requested documentation promptly to Mastercard during investigations or appeals as governed by sections 10.3 and 10.4 of the Mastercard SPME. SPME, noting that section 10.3.2 merchant investigation cooperation requirements have been removed.

Monitoring and Risk Factors

Halyard Pay evaluates merchant risk using updated Mastercard MATCH Listing Reason Codes, including new, specific definitions for elevated chargeback and fraud concerns:

• Laundering: Merchant presenting invalid transaction records rather than bona fide sales.

• Excessive Chargebacks: Monthly Mastercard chargebacks exceed 1% of sales transactions with total chargebacks ≥ USD 5,000. 6 5,000 USD.

• Excessive Fraud: Fraud-to-sales ratio of 8% or more, with at least 10 fraudulent transactions totaling 5,000 USD 5,000+ or more in a calendar month.

These clarified definitions, part of Mastercard's updated SPME MATCH Listing Reason Codes (see section 11.5), guide Halyard Pay’s risk assessments and chargeback management protocols to align with Mastercard’s evolving standards.

Source authority: Mastercard SPME §§10.1, 10.3, 10.3 (excluding 10.3.2), 10.4, 11.5.