When a cardholder disputes a transaction, the case moves through the applicable card-brand dispute process.
Understanding the basic stages can help you identify why funds were debited, when you may need to respond, and who reviews the case.
Not Every Case Follows the Same Path
This page describes the typical lifecycle of a chargeback. Retrieval requests, inquiries, pre-arbitrations, and PIN debit chargebacks may follow different processes.
See Types of Chargebacks for information about each case type.
Phase 1: The Cardholder Disputes a Transaction
The process begins when a cardholder contacts their issuing bank to dispute a transaction.
The issuing bank reviews the information from the cardholder and may initiate a chargeback under the applicable card-brand rules.
Filing a dispute does not mean the cardholder’s claim has been proven or that the merchant did something wrong. It begins a process that gives the merchant an opportunity to respond.
When a chargeback is received, the disputed amount is debited from the merchant’s account as part of the chargeback process.
Why Were the Funds Debited Before I Received the Notice?
The chargeback debit and the delivery of the case documentation are separate parts of the process. The funds will be debited before the Official Notice and Bank Documentation arrive.
The documents explain what the cardholder is disputing and provide the response deadline. They do not trigger the debit.
PayJunction does not initiate the chargeback or decide whether or when the funds are debited.
Do Not Issue a Separate Refund
If the chargeback amount has already been debited, do not issue a separate refund for the same transaction. Doing so will cause both the chargeback debit and the refund to be taken from your account.
Phase 2: The Merchant Is Notified and Responds
After a chargeback is received, the merchant is notified and provided with information about the dispute.
The TSYS Chargeback Department sends the Official Notice and Bank Documentation by mail and, when enabled, fax.
When Chargeback Notifications are enabled, PayJunction also sends an email alert. The email is a notification that chargeback activity has occurred; the Official Notice and Bank Documentation contain the complete dispute details and response instructions.
Notification methods vary for retrieval requests, inquiries, pre-arbitrations, and PIN debit chargebacks. See Types of Chargebacks for details.
Review both the Official Notice and Bank Documentation. They explain what the cardholder is disputing, the response deadline, and any specific information that should be addressed.
The merchant may accept the chargeback or submit a response disputing it.
If you choose to dispute the chargeback:
- Explain what happened and respond directly to the dispute details.
- Include documentation that supports your explanation.
- Submit the response through merlinkresponse.com by the deadline shown on the notice.
The TSYS Chargeback Department processes the response through the applicable card-brand dispute process and sends it to the issuing bank.
PayJunction’s Role
PayJunction does not initiate chargebacks, debit the funds, review the merits of the dispute, process the merchant’s response, or determine the outcome.
PayJunction provides available alerts and helps merchants understand the dispute and response process.
PayJunction cannot prevent a cardholder from filing a dispute or require the issuing bank to accept a merchant’s response.
Phase 3: The Case Is Reviewed
The issuing bank reviews the information provided through the dispute process.
The chargeback may be:
- Reversed, with the disputed amount credited back to the merchant
- Upheld, with the funds remaining debited
- Continued to another stage, such as pre-arbitration
The amount of time required to review a case varies. A decision may take several weeks or longer.
Who Reviews and Decides the Case?
The issuing bank reviews the information provided through the dispute process. The merchant does not automatically lose because the dispute was filed through the cardholder’s bank.
However, submitting a response does not guarantee that the chargeback will be reversed. If the case advances to arbitration, the applicable card brand makes the final decision.
The process determines who is financially responsible for the card transaction. Filing or continuing a dispute does not prove that the merchant did something wrong, and the outcome is not a court ruling or professional determination about the quality of the merchant’s services.
If the Dispute Continues
A dispute may continue to pre-arbitration after the merchant’s response has been reviewed. In some cases, a pre-arbitration may also be the first notice received.
Pre-arbitration response periods can be short. If you choose to continue disputing the case, additional authorization may be required.
If the case advances to arbitration, the applicable card brand reviews the dispute. Additional fees may apply, and the process may take several months.
See Types of Chargebacks for more information about pre-arbitration and other case types.
Important — A Favorable Outcome Is Not Guaranteed
Responding with relevant information and documentation may help address the dispute, but no response or document guarantees a favorable outcome.
The issuing bank and, when applicable, the card brand make the final decision—not PayJunction or TSYS.
Need Help?
If you are unsure what stage a case is in, cannot locate the documentation, or need help understanding the dispute, contact PayJunction Risk.
Phone: 800-601-0230 x5
Email: risk@payjunction.com