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Advanced phases requires Rainforest approval

Chargebacks can only move to pre-arbitration and arbitration if Rainforest has enabled these phases for your platform. Reach out to [email protected] for additional information.

There are 2 advanced phases of a chargeback - pre-arbitration and arbitration. A chargeback can go into these phases if Rainforest has enabled these phases for your platform. In most instances, chargebacks can be resolved during the inquiry and dispute phases. Rainforest only allows chargebacks to enter the pre-arbitration and arbitration phases under special circumstances.

If the customer or merchant is not satisfied with the decision of the dispute phase, either party can reject the decision and move the chargeback into pre-arbitration. If the pre-arbitration phase is ruled in favor of the customer, the merchant can reject the decision and move the chargeback into arbitration.

Chargeback phases

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Pre-arbitration

During the pre-arbitration phase, the merchant can respond to the dispute or accept the dispute as a loss. The funds for the chargeback will be pulled from the merchant if the previous status of the chargeback was Provisional Win.

Platform actions

Rainforest will notify the platform via webhooks when a chargeback goes into the status of Dispute Action Required. You should notify your merchant of the chargeback and they can choose to respond to the dispute via the Rainforest Chargeback Reporting Components.

Dispute decision

The chargeback dispute will result in one of the following:

1. Merchant wins the chargeback. The funds are returned to the merchant.
2. Merchant partially wins the chargeback. A partial amount of the chargeback is returned to the merchant.
3. Merchant loses the chargeback. The funds remain with the customer.
4. Merchant loses the dispute and proceeds to the arbitration phase.

Arbitration

If the chargeback is ruled in favor of the customer during the pre-arbitration phase and the merchant loses the dispute, the merchant can reject the decision and move the chargeback into arbitration. During the arbitration phase, the card network acts as the independent third party to resolve the dispute between the customer and the merchant. The arbitration phase incurs a fee that is typically $500 (depending on the issuing bank) and it is not advised to move chargebacks to this phase.

There are no actions for the merchant or platform to take during the arbitration phase. The card network will decision the chargeback and notify of the final decision. After the arbitration phase, neither the merchant or the customer can reject the decision.

Chargeback statuses

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The chargeback status is the descriptor of the current status in the life cycle of the chargeback. Below is the status diagram after a merchant responds to a chargeback in the dispute phase.

Status diagram

Advanced status diagram

The following status diagram shows the chargeback life cycle through all phases of a chargeback.

Webhooks

See Chargeback webhooks for all webhooks in the inquiry and dispute phases. Webhooks can also be configured to know when a chargeback moves to the statuses of Pre-Arbitration Processing and Arbitration.

Chargeback events