Chargeback glossary: the terms every merchant needs to know

The parties

Term	Meaning
Cardholder	The customer who paid with the card.
Issuer	The cardholder’s bank, which decides disputes in the cardholder’s favor or yours.
Acquirer	The merchant’s bank or processor, which receives chargebacks and passes them to you.
Card network	Visa, Mastercard, American Express or Discover, which set the dispute rules.
Processor	The service that handles your card payments: Shopify Payments, Stripe, PayPal and others.

Term	Meaning
Chargeback	The reversal of a payment after a cardholder dispute, with the money debited from you.
Dispute	The cardholder’s challenge to a charge. In many systems the word covers the chargeback too.
Representment	Your response to a chargeback, with evidence.
Evidence	The records you submit: order, consent, reminder, cancellation log, delivery, usage.
Pre-arbitration and arbitration	Further steps if the issuer rejects your response; rare and costly.
Dispute fee	A fee your processor charges per dispute. Check your processor’s terms.
Retrieval request	A request from the issuer for a copy of a transaction record, before a chargeback.
Pre-dispute alert	A warning before a chargeback is filed so you can refund. See chargeback alerts.

Term	Meaning
Reason code	The network’s code for what the cardholder claims, such as Visa 13.2. See the reason code guides.
Dispute ratio	Roughly, disputes divided by transactions, which networks monitor. See your dispute ratio.
Statement descriptor	The merchant text on a card statement. See statement descriptors.
Friendly fraud	A chargeback from a real customer who made the purchase. See friendly fraud.

Term	Meaning
AVS	Address Verification Service: a check that the billing address matches the card’s.
CVV	The security code on the card, checked at authorization.
3-D Secure	An extra cardholder authentication step that can shift liability for fraud to the issuer.
Compelling Evidence 3.0	A Visa program that can shift liability on fraud disputes using earlier undisputed transactions. See Visa 10.4.
CDRN, RDR, Ethoca	Alert and rapid-resolution services that help you refund before a chargeback.

A forced reversal of a card payment that the cardholder’s bank initiates after the cardholder disputes it.

Your response to a chargeback, with evidence, which the issuer reviews.

The issuer is the cardholder’s bank. The acquirer is the merchant’s bank or processor.