Disputes

Disputes (also known as chargebacks) are a challenging but inevitable part of e-commerce. They arise when a customer queries a transaction with their card issuer. The issuer creates a formal dispute which immediately reverses the payment, debiting your account for both the payment amount and a dispute fee (e.g., £15 for merchants in the United Kingdom).

It's important for you to monitor such disputes and respond to them as quickly as possible — thankfully, we've made the workflow simple.

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COVID-19
Read the card schemes' general guidelines and our frequently asked questions about disputes and COVID-19 below. As always, we encourage you to work directly with your customers to resolve disputes promptly and issue refunds where necessary.

Stages of a dispute

Step 1: Payment charged back

A dispute results in a debit to your account, unless that payment has already been refunded (in which case we resolve it for you) or the issuer reverses the dispute (in which case you'll be repaid the disputed amount).

Step 2: Submit evidence

If you wish to argue your case, you need to submit evidence to us so that we can pass it on to the card scheme. It's best to respond to a dispute as soon as possible.

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A dispute process may go through several statuses before it is resolved. For more information on each status, see our page on chargeback codes.

Step 3: Await the outcome

Once you've submitted your evidence, you'll have to wait up to 55 days for the issuing bank to make a decision.

Outcome A

• If they accept your evidence, you will be credited back the disputed amount. Congratulations, you've won the dispute!

Outcome B

• If they reject your evidence, you have lost the dispute. There are no further financial implications.

Dispute reasons and recommended evidence

There are several reasons a customer might dispute a payment, but the most common are fraudulent charges. The following section outlines all possible dispute reasons, as well as the type of evidence we recommend submitting to make your case. What you provide to us should be the most relevant evidence to the specific case.

Fraudulent

The customer claims they didn't authorize this payment. This can be the result of a lost or stolen card. It is not easy to win this kind of dispute and the evidence listed below is only relevant in specific cases. Sometimes, however, buyers simply forget about purchases they've made. So, if possible, try to contact the cardholder and ask them to withdraw their dispute.

In the API, this will be displayed as "category": "fraudulent".

Unrecognized

The customer does not recognize this payment on their bank statement. Similar to fraudulent cases, the evidence below is relevant only for specific cases. Buyers occasionally forget about a purchase they've made, or they don't recognize your billing descriptor, so you could try to contact them and ask them to withdraw their dispute.

In the API, this will be displayed as "category": "unrecognized".

Canceled subscription

The customer claims that they've been charged for a canceled subscription. It's possible they forgot about your cancellation policy and expected charges to be terminated. The cancellation policy can be a useful piece of evidence to provide here.

In the API, this will be displayed as "category": "canceled_recurring".

Product / service not received

The customer claims they never received the products they were charged for. In this case all evidence to prove that the buyer received the product or service can prove helpful.

In the API, this will be displayed as "category": "product_service_not_received".

Not as described

The customer claims the item does not have the agreed features or is broken or damaged. Evidence that proves that the product/service provided was the agreed one would help in this matter.

In the API, this will be displayed as "category": "not_as_described".

Credit not issued

The customer claims that the product or service had been returned and no refund/credit was issued. If you have in fact refunded the customer, make sure to provide that evidence. If your customer was not eligible for a refund, you could provide your refund policy as evidence.

In the API, this will be displayed as "category": "credit_not_issued".

Duplicate

The customer claims they have been charged more than once for the same purchase. Convincing evidence in this case would be proof that two separate products/services have been purchased.

In the API, this will be displayed as "category": "duplicate".

Incorrect amount

The customer claims that they have been charged the wrong amount. Indicating that the correct amount has been charged by providing the receipt or invoice would prove helpful. If available and relevant, any customer communication may also be of use.

In the API, this will be displayed as "category": "incorrect_amount".

General

If we are unable to map the dispute to any of the reasons listed above, we consider it to be a general dispute.

In the API, this will be displayed as "category": "general".

Disputes and COVID-19

Card schemes haven't yet made changes to their dispute rules in response to COVID-19, but they are monitoring the situation to prevent excessive volumes. They have also provided guidelines to help minimize the effect of COVID-19 on the dispute process:

• Cardholders should work directly with merchants to resolve their issue.
• Act in good faith and make every effort to be flexible when resolving a dispute.
• Merchants can offer credit vouchers for future use. Note, however, that you can't impose them if the customer wants to be credited back for services not received.
• Issuers should give merchants adequate time to process a refund before initiating the dispute process.
• Submit only valid disputes/dispute responses.

The agreed terms and conditions at the time of the transaction will prevail unless the local law states otherwise.

Frequently asked questions

Q. My customer purchased goods/services and was told that, due to government restrictions, they cannot use the goods/services, but I am still able to provide goods/services. Are disputes raised under the category "Product/Service not received" valid?

No. The issuer does not have a right to dispute. If you are willing and able to provide the goods/services, you are entitled to be paid.

Q. My customer purchased goods/services, but I failed to inform them of our cancellation policy at the time of the transaction, and they subsequently cancelled the goods/services. Are disputes raised under the category "Credit not issued" valid?

Yes. If you failed to disclose your cancellation policy, and you didn't agree with the customer directly, the, the issuer has the right to raise a dispute on behalf of the customer. If the services were purchased through a third-party resale site, the refund policy of that third-party sale would apply to services cancelled by the customer, not the refund/cancellation policy of the original merchant.

Q. I chose to cancel services for my own reasons and not due to any government prohibition. Are disputes raised under the category "Product/Service not received" valid?

Yes. The issuer can pursue the dispute under this condition, because you cancelled and were unable to provide the services. Your customer must first attempt to resolve the dispute with you, unless local law prohibits the issuer from requiring the customer to first contact the merchant.

Q. I was willing and able to provide the purchased services/goods, but the customer cancelled outside of my policy. As a courtesy, I offered a credit note/in-store credit to the customer for future use, but, before they could use it, I became bankrupt and ceased operations. Can they dispute the transaction?

No. The customer cancelled outside of your disclosed policy, so the issuer is liable for the disputed transaction.

Q. If the customer voluntarily accepts credit for a cancelled service, does this prevent them from later disputing the original transaction?

No. If the cardholder had a right to dispute the transaction, accepting a voucher does not alter that right.

Q. The customer bought a gift card for my store from a third-party vendor, using their card. I'm now bankrupt and have ceased operations/closed all my stores and services cannot be rendered, so the gift card has no value. Does the issuer have a right to dispute? And, if so, who is responsible for the dispute? The acquirer for the third-party vendor or my acquirer? How long does the issuer have to raise a dispute with the relevant acquirer?

Yes, if you (the merchant named on the gift card) are unable to provide the services, a right to dispute exists under the category “Product/Service not received”. The customer must first attempt to resolve the dispute with the merchant of record (the third-party vendor), unless the issuer is prohibited under local law from requiring the customer to first contact the merchant.

The dispute would be initiated against the acquirer of the third-party vendor (the merchant of record), the vendor being ultimately responsible for the transaction because it sold the gift card to the customer.

The dispute should be raised within 120 days from the transaction date, or 120 calendar days from the gift card's expiration date, as long as the latter doesn't exceed 540 days since the transaction.

Q. My customer can make new travel arrangements, but has incurred out-of-pocket expenses. Can these costs be included in the dispute against the acquirer on the original travel purchase?

No. The dispute value is limited to the value of the services not received from the merchant that cancelled the original travel.

Q. The customer attempted to return goods within my disclosed policy, but my stores have been closed due to government prohibition or regulation. Do they have a right to dispute?

Yes. The issuer can process a dispute. Your acquirer would be expected to refute the validly of the issuer's statements and support that you were, in fact, open and able to accept returns. If your acquirer is able to support that you were open for business, the burden of proof would fall on the issuer to prove otherwise.

Q. If the customer calls me but is unable to get through, is that considered a valid attempt to resolve to meet dispute requirements?

Yes. Card networks consider any of the following to be valid evidence of an attempt by the customer to resolve a dispute:

• The customer called you, but your number was out of service, disconnected or the call continued to ring without an answer.
• The customer's email to you was returned because your email address was invalid, or you did not reply.
• The merchant of record was contacted but referred the cardholder to a different merchant or entity.
• The issuer certifies that they attempted to resolve the dispute with you on behalf of your customer.

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