Diana: The answer can vary by situation. Whether a card issuer incurs a financial loss is based on compliance with Regulation E as well as other applicable rules and regulations, including Mastercard.


Diana: Generally, the chargeback timeframe is based on the date of expected delivery or fulfillment when a transaction involves the promise of some future product or service.


Diana: Whether a card has only a magnetic stripe or is EMV enabled (contains a chip) is relevant to transactions conducted in a card-present environment. Therefore, chargeback reasons for the EMV liability shift are relevant. Currently, all merchant types in the U.S. fall into the liability shift rules.


Diana: As with any other claim you take the information from the cardholder and evaluate the applicability of Regulation E, brand rules and any other requirements. Subsequent steps are based on which of those apply to the specific claim.


Diana: Brand rules have certain requirements to assist cardholders with claims, including claims resulting from dissatisfaction with a merchant’s fulfillment as promised. Other than fees related to compliance with Regulation E error resolution, I am not aware of any prohibition of fees for handling exceptions. In the spirit of the brand rules, I believe issuers should assist their cardholders to the extent possible and without charging. Using a card instead of any other payment method benefits the entire ecosystem, including the cardholder and issuer.


Diana:  Clearly understanding the initial claim is important. When compelling evidence is received with the second presentation it’s critical to review it thoroughly with your cardholder. Your processor should also be prepared to advise on your potential success with pre-arbitration based on their experience, so don’t be afraid to ask.


Diana: The Mastercard rules have no stated timeframe for applicability. Refer to the comparison supplemental handout for the exact verbiage or view it online in the rules document linked in a supplement.


The chargeback process is riddled with rules and time restrictions. Don’t risk a loss for your financial institution or cardholder. Learn the ins and outs of debit card chargebacks to protect everyone’s rights with this timely on-demand webinar,  Mastercard Debit Card Chargebacks: Rules, Rights & Challenges.