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MasterCard Chargeback Procedure


A Retrieval Request is created when the Card Issuer requests more information about a transaction on behalf of the Cardholder. These are not financial disputes and are not compulsory, meaning that the issuer can go straight to a chargeback if desired. However, this process is recommended as it can resolve a lot of issues that could have been unnecessarily escalated to a CBK1.

1.1. What is required by the Merchant?

The Merchant will be notified by via an email. This is fulfilled automatically by providing basic transaction information. No documentation is required to be provided at this stage.


2. CBK1

These are financial disputes; they occur when a cardholder disputes a transaction on their bank statement. Common reasons for this can include fraud, processing errors, authorization issues or the wrong name on the cardholders bank statement.

Once this is initiated by the cardholder, will notify the Merchant by sending out a chargeback notification email. The notification will contain:

  • The number of cases received,
  • The relevant information of each transaction.
  • The timeframe in which you must respond with appropriate documentation.

It is important to submit representation as early as possible, as it gives the chargeback team adequate time to review the case and either pass it onto the acquirer or make suggestions on how to improve upon the case. Failure to do this within the timeframe can result in a chargeback dispute being automatically accepted (lost).

2.1. What is required by the Merchant?

At this point, the Merchant needs to decide if the chargeback is to be accepted or if it is going to be challenged. If the Merchant accepts the chargeback - they are then liable for the chargeback, the issuer will be credited and no further action is taken. However, if they challenge the chargeback it should then be represented using valid evidence to challenge the reason code.



Representment should then be passed onto the chargebacks team who will review and either pass it onto the acquirer or make suggestions on aspects that could be changed and made more accurate to the chargeback reason. After documentation is sent, the issuer must consult with the cardholder and decide one of two options; accept the representment and credit the chargeback amount (the Merchant wins the case) or take the case to CBK2 if sufficient evidence has not been provided.


4. CBK2

When disputing a CBK2, a €20.00 fee will be applied to the Merchant. This is a Mastercard fee. At this point you have three options:

  • Challenge the CBK2 (Decline); to do this, valid and new/additional documentation can be provided to the chargebacks team as requested in the e-mail notification.
  • Accept the CBK2; If the Merchant wishes to accept the CBK2, they must confirm this with the chargebacks team who will notify the acquirer. The case will be closed, once accepted, and only the chargeback amount will have to be paid back to the cardholder.
  • Partially Accept (Agreeing to be liable only for part of the chargeback amount); the Merchant can decide to accept part of the CBK2 and challenge the remaining partial amount of the CBK2. For this scenario to be possible, the Merchant must provide with corresponding documents that shows the reason for declining part of the disputed amount, such as documents which show that a partial refund was already given to the customer.



After the CBK2 is challenged, the case can escalate to arbitration, should the new documentation provided at the CBK2 stage not resolve the dispute. Arbitration is a process where Mastercard comes into rule and determines who should be financially liable for the chargeback. This part involves very high fees that can go up to €570 or sometimes more, so it is always important to consider all factors before filing for arbitration.

5.1. What is required by the Merchant? 

At this point, if the Merchant accepts liability for the case the Merchant must pay the filing fee, the chargeback amount and whatever fees Mastercard deems necessary. However, declining here, Mastercard will rule the case and decide who is liable and what fees must be paid. The losing party will have to pay for everything. This includes the filing fee, review fee, the chargeback amount and Mastercard’s technical fees that they see suitable.




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