A pre-arbitration chargeback is a request made by the customer to reopen a chargeback claim that they had filed earlier. If you, the merchant, provide a receipt that does not contain enough information about the customer and the details of the service that was provided, this is when the pre-arbitration is initiated by the bank. The process can also be referred to as a second chargeback.
The pre-arbitration chargeback stage is a merchant’s last opportunity to successfully resolve a chargeback. Frequent chargeback cases filed against a merchant can affect how their customers view the business later on.
How Paystack notifies you about pre-arbitration chargebacks
When your business receives a pre-arbitration chargeback, we'll notify you about it via email. In this email, we'll provide information about why the customer raised this pre-arbitration chargeback, how to resolve the pre-arbitration chargeback and the kind of evidence that is acceptable.
To ensure that you receive the notifications about pre-arbitration chargebacks and resolve them in time, it’s important that your Chargeback Email address on your Paystack account is a closely monitored email address of your business. Please take a moment to review the email address set as your Disputes Email.
How to resolve a pre-arbitration chargeback
When a customer raises a pre-arbitration chargeback, you have another opportunity to respond to the chargeback. At this stage, you have 48 hours to provide a response. The chargeback can either be accepted or declined. In order to properly resolve this chargeback, it is helpful to reach out to the affected customer to understand their issue so you can solve it.
If you would like to let the customer get their money back, you should accept the chargeback. After accepting the chargeback, the customer will get their refund within the next 12 working days.
If you want to decline the chargeback at this stage, you’ll need to provide all the evidence in your possession to help prove that the customer's claim is false. This evidence has to follow the guidelines of the card schemes. You can find information about what acceptable evidence looks like in this article. Alternatively, if you were able to resolve the issue with the customer, you should have the customer write a letter to their bank stating that they no longer want to dispute the transaction. After the customer sends this letter to their bank via email, you should provide us with a copy of the letter. This letter has to contain the following details:
- Customer’s full name
- Customer’s email address
- Customer’s phone number
- Customer’s billing address
- Transaction amount
- Transaction date
- Transaction reference number
If you decline the pre-arbitration chargeback and the customer is still unsatisfied, they can request another reopening of the chargeback. If the chargeback is reopened, it will go to the stage called arbitration. At the arbitration stage, significant losses can be incurred so it’s best to avoid it.
You can find more information on arbitration chargebacks here.