Tips for incoming disputes

In this Article

• What to do when you receive a notice
• Common reasons for disputes
• Submitting a response

What do to when you receive a notice

When you receive notification of a new dispute, it is very important to log into the merchant portal to review the Reason and find the Response Due Date.  

Do not issue any new refunds to the customer. If your customer should get money back, the disputes process will take care of returning any funds owed to the cardholder.

Common reasons for disputes

There are many reasons why a cardholder disputes a charge. If it important to understand why your customer is challenging the charge so you can prepare the strongest rebuttal.

• The cardholder does not recognize the charge.  If they did not recognize the charge on their statement, you can explain it was a legitimate charge and ask them to contact their issuing bank to cancel the dispute with the card brand. This can also help you and your business prevent future disputes. Depending on the situation, you may want to consider changing how the business name appears on statements or adding a message to emails to explain what customers will see on their statement.
• The customer was not satisfied. If the customer was not satisfied with services rendered, it's not too late! This is a great opportunity to work through a resolution that both of you can agree on. If you have ask them to reach out to their bank to cancel the dispute, be sure to check the merchant portal regularly to make sure their bank follows through and officially cancels the dispute with the card brand. You can submit a response that says you spoke with the cardholder and they agreed to cancel the dispute but you are not able to cancel it on their behalf.
• Fraud. Fraud is actually a very broad category and really just means the transaction was unauthorized. There are a number of situations that can fall into this category. If you know your customer base and do in-person work for them on-site, the risk of having a truly fraudulent customer is fairly low. If a cardholder account was compromised around the time of the original transaction, it is possible some legitimate charges were also disputed my mistake. You can simply ask your customer to make another payment with the new card. If the customer denies disputing the charge, consider asking them to review their statement to confirm they see the original charge. If they do not see a charge or a dispute on their statement, the card number may have been entered incorrectly and charged someone else's card in error. In that situation, it is best to let the chargeback return funds to the original cardholder and collect another payment from your customer.

Submitting a response

If you are able to resolve the issue with the customer, you can ask them to cancel the dispute. Note: The issuing bank must formally cancel the dispute through the chargeback process. Just telling the bank that they resolved the issue with you is not enough to cancel the dispute or award the case in your favor.

If you are not able to resolve the issue with your customer, formally respond to the dispute to explain why the charge is legitimate and funds should not be returned to the cardholder. If a refund was already issued before the date on your dispute notification, include proof of the refund in your response and request for the dispute to be canceled. See Responding to disputes for more guidance about preparing a response.