Adyen retail report: The checkout experience
It’s called the Mastercard Dispute Resolution Initiative and it will be a rules-based chargeback decisioning process.
The aim from Mastercard is to improve the dispute handling process by automatically detecting invalid disputes, shortening dispute resolution timeframes and updating some dispute reason codes and their conditions.
This will hopefully decrease chargeback volumes and allow for faster resolution of disputes.
The Dispute Resolution Initiative will roll out in phases, according to the below timelines:
Issuers will be required to request more information from their cardholders so they can file chargebacks for the following reason codes:
By requesting this information at the first chargeback stage, Mastercard aims to reduce invalid chargebacks raised without the necessary information. Our customers don’t need to take any action regarding this change.
As of April 12, 2019, if you initiate a refund after the chargeback has been reversed and the issuer files a second chargeback, it will result in a double loss.
We don’t recommend you initiate refunds once a chargeback has been reversed.
As a best practice, communicate clearly with your shopper if you do perform a refund after the first chargeback has been reversed.
As always, if a refund is issued before the first chargeback, you have one opportunity to provide the refund information to the cardholder, which is in the response/defense to the first chargeback.
We have automated dispute defense for fully refunded transactions and will always send the refund details to cardholders.
To support faster resolution of disputes, Mastercard has reduced the timeframe to file a chargeback for reason code 4834 - Point of Interaction Error from 120 days to 90 (counted from the transaction date). You won’t need to do anything here if you’re one of our customers.
Lastly, the below chargeback reason codes will be removed from the rules and issuers will no longer be allowed to file a chargeback:
Mastercard has announced they are planning additional changes effective in October 2019. We will inform you as soon as we know more.
Mastercard will not send a second chargeback for the following reason codes.
Instead, for these reason codes the issuing bank will be able to send a pre-arbitration chargeback.
Mastercard will align with the Visa collaboration chargeback process (the consumer dispute category) whereby issuers can continue the dispute with a pre-arbitration chargeback.
Based on the current information Mastercard has provided us there will not need to be any development work, as the new flows should match the ones currently used for Visa VCR.
Merchants should keep in mind that Mastercard is only removing the second chargeback cycle for the above mentioned dispute reason codes.
Dispute reason codes that do not fall in these categories (for example, 4808 - Authorization related disputes) can still receive a second chargeback.
These announcements are subject to change by Mastercard, we will notify you as soon as we have the information to hand.
Updated October 2, 2018: New information has been released from Mastercard. Various changes have been made to the original announcement.
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