Understanding Discover Chargebacks with PbN Payments

When a chargeback is initiated, it’s important for your practice to act quickly and carefully to resolve the dispute in your favor. Here’s a step-by-step breakdown of the Discover Dispute Process and what actions you need to take at each stage.

1. Notification of Chargeback (NoC)

• What Happens: You’ll receive a notification that a chargeback is being initiated.
• Action Required: Prepare and submit defense documents to contest the chargeback or choose to accept the dispute.
• Key Point: The chargeback debit will typically happen a few days after receiving the NoC.

2. First Chargeback

• What Happens: The disputed amount is withdrawn from your account.
• Action Required: You have 40 days to upload defense documents or accept the dispute.
• Key Point: If no action is taken within the 40 days, or if you accept the dispute, this stage is the final resolution.

3. Information Supplied

• What Happens: PbN forwards your defense documents to the card network (Diners).
• Key Point: Once your documents have been sent, you can no longer modify them.

4. Chargeback Reversed

• What Happens: The disputed amount is temporarily returned to your account while the issuer reviews your defense.
• Key Point: If your defense is accepted, the chargeback is successfully resolved at this point.

5. Pre-Arbitration

• What Happens: If the issuer rejects your defense, a second chargeback will be initiated, and the issuer will file a Pre-Arbitration case within 30-32 days of the defense submission.
• Key Point: After this stage, you cannot file an arbitration case.

6. Pre-Arbitration Outcomes

• Pre-Arbitration Won: If the issuer accepts your defense, the chargeback is resolved in your favor.
• Pre-Arbitration Lost: If your defense is rejected, a second chargeback is finalized, and there is no further option for arbitration.

7. Second Chargeback

• What Happens: A second chargeback is processed if the issuer declines your defense.
• Key Point: This is the final stage, and no further recourse is available through Diners.

Submitting Defense Documents: Formats and Size Requirements

Ensure your documents meet the following criteria to avoid delays in processing chargebacks:

• File Formats: JPG, TIFF, or PDF (Max file size: 3 MB per file)
• Specific Requirements: For Discover chargebacks, files must be no larger than 3 MB.

Required Documents for Dispute Defense

To build a strong defense, here’s a list of key documents to provide based on the nature of the chargeback:

General Documents

• Invoice copy
• Description of goods/services
• Proof that any credits or reversals were not addressed by the issuer
• Evidence that the cardholder used the service and did not cancel according to your policies
• Screenshots of terms and conditions agreed upon at purchase (not just links)

Already Paid

• Proof of non-payment by the cardholder
• Evidence of any refunds or payments made directly to the cardholder
• Communication records regarding payment status or other agreements

Canceled Services

• Proof that your cancellation or return policy was shared and agreed upon at purchase
• Evidence the service was used between the billing and cancellation dates
• Documentation showing the cardholder’s request for cancellation on a different date, if applicable
• Proof that the cardholder did not attempt to resolve the issue with you (e.g., no emails or calls)

Canceled Transactions

• Invoice and service description
• Confirmation email sent to the cardholder
• Proof that the service was provided (confirmation email, invoice, etc.)
• Dates the cardholder used the service
• Record of non-disputed payments
• If available, include CVV/CVC check results and verification details like IP addresses and device IDs

Canceled Recurring Transactions

• Proof of agreement to your cancellation or return policy
• Evidence that services were used between the billing and cancellation dates
• Documentation showing the cardholder’s continued interest in the service
• Proof that the cardholder didn’t attempt to cancel or resolve the issue