A first chargeback is the opening stage of a formal card dispute, in which the card issuer reverses a transaction and claims the funds back from the merchant's acquirer. The issuer raises it after a cardholder complains, or after the issuer itself identifies fraud, and must cite a chargeback reason code and act within the scheme's time limits. The acquirer debits the merchant and notifies it, usually with a chargeback fee.
The merchant can accept the first chargeback or contest it through second presentment, also called representment, by supplying evidence. If the issuer still disagrees, the dispute can move to pre-arbitration and then arbitration by the card scheme. Some schemes have restructured their processes, for example Visa's dispute model combines stages, but the term is still widely used. The first chargeback is often preceded by a retrieval request or a pre-dispute alert.