Dispute

A dispute of card and transaction terms occurs when a cardholder disagrees with a transaction charged on the card account statement. Most transaction-based disputes are resolved between the cardholder and the merchant, where either the charge is identified as valid or the merchant processes a refund to the cardholder. A refund could occur in a case of merchandise having been returned by the cardholder or the merchant having charged the transaction twice. 

Yet a cardholder may face situations in which the merchant does not agree to refund an invalid transaction, or the transaction was charged by fraudulent means. In such scenarios, the cardholder may lodge a dispute with the card issuer or processor, identifying the transactions with which the cardholder disagrees. 

Once a dispute is lodged with the card issuer or processor, it is taken to the merchant via the card network. The merchant bank processes it as per guidelines and regulations established by the card network. A dispute may pass through multiple steps and exchanges with the merchant, and it will end with a resolution in favor of the cardholder or merchant. When a card issuer sends the dispute to the merchant, it is called chargeback. The merchant's response to the issuer chargeback is called re-presentment, or the second presentment.