5 minutes

Pre-Arbitration: The Final Chance to Overturn a Chargeback

Written by
Don Hamilton
Published on
March 11, 2024


You’ve been through chargeback representment.

You’re still not satisfied with the result.

You have one option left prior to engaging in formal (and expensive) arbitration at the card-network level: pre-arbitration.

Note that the cardholder can engage in pre-arbitration, too. You might be drawn into it if you won the representment fight, but the cardholder disagrees and wishes to fight the fight again, this time with new evidence.

The goal of pre-arbitration is to resolve the dispute before entering the gruelling, formal arbitration stage.

Let’s see how you might find yourself in pre-arbitration. Then, we’ll take a look at what to do about it.

The Steps Leading to Pre-Arbitration

Initial dispute

The chargeback representment process, of which pre-arbitration is a part, begins when a cardholder disputes a transaction with their issuing bank.

The merchant (you) receives a chargeback notification.

An investigation by the cardholder’s issuing bank begins.

First chargeback decision

If the bank finds the dispute valid—based only on the cardholder’s side of things—it initiates a chargeback. The transaction is reversed and your account is debited for the disputed amount.


Now it’s your turn. You can contest this chargeback decision through the representment process. You submit evidence that the charge was valid and legitimate. This begins the representment.

Second chargeback

The issuing bank may overturn the chargeback, resulting in a second or pre-arbitration chargeback. The cardholder may then dispute this chargeback.

Or, if the chargeback is not overturned, you can dispute the second chargeback decision.

This process is different for the various issuing banks and can get a bit confusing. It’s crucial to understand the issuing bank’s policies and follow them to the letter.

Entering Pre-Arbitration

If the original dispute remains unresolved after the second chargeback, or if either party disputes the outcome of the representment process, the next step is to enter pre-arbitration.

A formal pre-arbitration request from the disputing party (either you or the cardholder) is required to initiate pre-arbitration. The pre-arbitration process obeys the card network’s specific procedures.

Along with the formal request, additional evidence is submitted to support their case. The opposite party also submits more evidence to bolster its position. They may simply agree to the claims if they don’t wish to fight anymore.

If the dispute is not resolved after pre-arbitration, the next step is to move to the formal arbitration phase at the card network level.

The Pre-Arbitration Process

Again, the pre-arbitration phase is critical because it represents the last chance for a negotiated or mediated resolution before entering the more formal and often costly arbitration process.

Try to resolve your differences before taking this step.

The steps in the pre-arbitration process are as follows.

Submit the pre-arbitration request

Whoever seeks pre-arbitration must formally submit a pre-arbitration request. The opposing party gets a copy of it, including all the attached evidence.

Exchange evidence

The opposing party reviews the seeker’s supplied arguments and evidence. They can also submit their counterarguments and additional evidence.

Review period

A period of evidentiary review is given to both parties by way of their respective banks. This time is used to read and process their opponent’s case. The timeline for this period is defined by the card network’s rules.

Opportunity to resolve the dispute

During the review period, both parties have the ability to resolve the dispute before advancing into arbitration. One party may choose to accept the other party’s arguments, evidence, and provide an end to the fight.

Decision making

One party may present evidence that significantly alters the situation. The other party may decide to settle the dispute based on this new information. Either the merchant or the cardholder may accept responsibility and resolve the issue.

Escalation to arbitration

If you reach this point without a settlement, the next step is to escalate to formal arbitration. In arbitration, the card network acts as a neutral third party. The card network makes a final and binding decision.

Important considerations

  • You must be aware of all laws and policies affecting representment, pre-arbitration, and arbitration.
  • Strict deadlines for each step of the process are enforced by the banks and card networks. Miss a deadline, lose the case. It’s that simple.
  • Pre-arbitration and arbitration incur significant additional fees. These fees are usually paid for by the loser. Be sure of the strength of your case before entering into these phases.
  • The quality of your evidence is what will matter in the end. It must clearly and convincingly prove your case, or the opposite party will win.
  • Pre-arbitration and arbitration are complex and expensive. This incentivises the parties to resolve their dispute before getting this far into the process.
  • If you have an option besides arbitration, you may be better off taking it.

Looking Forward

The ability to avoid chargebacks, representment, pre-arbitration, and arbitration entirely (well, 99% of them anyway) is available through our service,

We provide an automated chargeback prevention service. We monitor your transactions 24/7 in real-time.

When a transaction pattern shows signs of likely ending in a chargeback, we notify you. We provide you with the appropriate, automated actions to take, such as immediately issuing a refund to the cardholder.

All you must do is click to approve and initiate the actions.

Chargeback averted.

Visit for more information, pricing, and to book a free demo of our platform. Reducing chargebacks by 99% helps rapidly scaling businesses to grow unhindered by chargeback woes.

FAQ: Pre-Arbitration

When does a dispute enter pre-arbitration?

A dispute enters pre-arbitration if either the merchant or the cardholder is not satisfied with the outcome of the representment process and decides to challenge the decision before moving to formal arbitration.

How do I initiate pre-arbitration?

To initiate pre-arbitration, the disputing party must submit a pre-arbitration request to the opposing party. This request should include all relevant evidence and arguments supporting their case, adhering to the specific guidelines and deadlines of the card network involved.

What type of evidence is needed for pre-arbitration?

Evidence for pre-arbitration may include transaction receipts, proof of product delivery or service provision, communication records between the merchant and cardholder, and any other documentation that substantiates the legitimacy of the transaction or the basis of the dispute.

Can new evidence be presented during pre-arbitration?

Yes, both parties have the opportunity to present new evidence or additional arguments during pre-arbitration that were not previously considered in the chargeback or representment phases.

How long does the pre-arbitration process take?

The duration of the pre-arbitration process varies depending on the complexity of the dispute and the specific timelines set by the card network. Parties should be prepared for this phase to last several weeks to a few months.