Guide · Dispute stages
Pre-arbitration: what happens when the bank pushes back
Pre-arbitration is round two of a chargeback. You responded, and the cardholder’s bank still disagrees, usually because it has new information. You can accept the loss or stand by your case, and if the banks still can’t agree, the card network decides in arbitration.
Key takeaways
- It’s round two. You answered, and the cardholder’s bank still says no.
- It needs a reason. Under Visa’s rules the bank must bring new information, change the dispute reason validly, or certify the cardholder still disputes after seeing your evidence.
- Silence is surrender. Under Visa’s rules, no answer in time means you accept the loss.
- Round one matters most. Evidence you left out the first time is hard or impossible to add now.
What is pre-arbitration?
Pre-arbitration is the cardholder’s bank saying: “Your response didn’t settle this. Here’s why. Accept, or we take it to the card network.” It’s the last negotiation step before arbitration, where Visa or Mastercard itself rules on who carries the loss.
For merchants it usually arrives as an update on a dispute you thought was handled. The subject line often reads like “the bank has not accepted your evidence.” It isn’t a new chargeback. It’s the same case, escalated.
Why the bank pushes back
A bank can’t just disagree. Under Visa’s rules for consumer disputes and processing errors, a pre-arbitration attempt has to rest on one of these:
- New documentation or information, such as a fresh letter from the cardholder.
- A changed dispute reason, allowed only if the original reason was valid and your own evidence revealed a new one.
- Certification that the cardholder still disputes, when you showed they had withdrawn.
- Certification that the bank contacted the cardholder about your evidence and got an explanation of why they still dispute.
Mastercard works the same way in outline: the bank explains why your response was invalid or brings new evidence.
Insight: read the bank’s new reason like it’s the whole case, because now it is. Your round-two answer should address that new point directly, not repeat round one.
A Visa twist for fraud disputes
For Visa fraud and authorization disputes (categories 10 and 11), the stages are named differently. Your bank’s answer to the dispute is the pre-arbitration attempt. If you respond to a Visa fraud chargeback, you’ve technically started pre-arbitration already. The cardholder’s bank then has 30 days to reply, and it can decline only on specific grounds. If you supplied Visa’s Compelling Evidence, for example, the bank must certify it contacted the cardholder about it.
Pre-arbitration time limits
| Step | Visa (consumer disputes and processing errors) | Mastercard |
|---|---|---|
| Bank files pre-arbitration | 30 calendar days from your response | 30 calendar days from the second presentment |
| Your bank accepts or declines | 30 calendar days | 30 calendar days; doing nothing counts as accepting |
| Case goes to arbitration | 10 calendar days after the decline | 15 calendar days after the rejection |
As in round one, those clocks belong to the banks. Your processor gives you a shorter window and prints it on the notice. That date is the one that counts. See the full chargeback time limits guide.
Your options
- Accept. You take the loss and the case closes. Sometimes this is the right call, especially if the bank’s new information is accurate.
- Decline and stand by your case. You answer the new point with records. If the bank still disagrees, it can file for arbitration.
Some processors don’t offer every step. Stripe, for example, says it doesn’t support the arbitration phase at all, so a Stripe merchant may only see the result. Check what your processor allows.
One hard rule: you can’t fix round one in round two. Mastercard says it won’t consider documents that were required in your first response but not provided, or second-presentment documents received after the pre-arbitration filing. Put everything that matters in your first response.
What arbitration means
In arbitration, the card network decides. It rules on the file the two banks already exchanged. Visa’s decision is final, with an appeal allowed only when there’s new evidence that wasn’t available at filing and at least $5,000 in dispute. Mastercard allows a narrow written appeal.
It costs money. The losing side pays a network review fee, and your acquirer passes it to you if you lose. Visa doesn’t publish the amount in its public rules, so ask your processor before you go. For a small charge, arbitration rarely makes sense. See chargeback fees for the other costs.
If you lose round two
The money stays with the cardholder, and any fees stay charged. You still have a few moves outside the card system. Read what to do after you lose a chargeback.
Dispute Daddy builds your response from your dispute notice and your own records, and you approve it before you submit it. See how the Dispute Daddy Method works.
