This occurs when a cardholder has exhausted their chargeback rights, but the issuer believes the acquirer’s second presentment is invalid or if the issuer did not receive documentation within 10 calendar days of the second presentment. Arbitration rulings are determined by the card network instead of the issuing bank.
Merchants incur a minimum fee of $300 when a dispute escalates to arbitration. If the card network determines the customer dispute to be invalid, the merchant is refunded the $300 fee. If the customer dispute is decided to be valid, the merchant is assessed an additional $300 fee.