Disputes

Once in a while sale transactions just don’t run as smoothly as they should’ve. The cardholder files a dispute, requesting the card issuing bank to reverse the paid amount. This is what we call a chargeback.

Some common reasons which causes cardholders to file a dispute include:

  • Item not received: Cardholders claim that the product or service paid for was not delivered.

  • Fraudulent: This happens when the cardholder claims that they didn’t authorize the charge. This is one of the most common for disputes and can happen if the card was lost or stolen.

  • Item received not as described: The product was delivered but is defective or not as described.

  • Unrecognized transaction: The cardholder has forgotten or does not recognize the charge appearing on their statement.

  • Recurring transaction not canceled as requested

Chargebacks are often initiated by cardholders. But when it comes to lost or stolen cards the bank may automatically file a chargeback on behalf of the cardholder as form of protection while investigation to determine the legitimacy of the chargeback takes place.

How does the dispute process work?

dispute flow

  1. The cardholder initiates a dispute with the card issuing bank. We receive a notification of the disputed charge from our acquiring bank and will automatically notify you via email with all the details.
  2. The disputed amount is deducted from your account’s balance.
  3. You could choose to accept the chargeback or provide evidence to prove the charge’s legitimacy.
  4. Evidence is passed on to the credit card issuing bank for review. The process generally takes 60-90 days. If the chargeback is proven to be legitimate, the disputed amount will not be restored back to your account.

In order to resolve disputes, providing relevant information which proves the transaction was legitimate and that the goods/services have been successfully delivered to the client means that the merchant should win the case. Failing to provide such evidence or if the transaction is proved to be fraudulent can result in the merchant losing.

What kind of evidence can be used?

Physical goods:

  • Cardholder details: name and shipping address
  • Details of purchase: list of products purchased
  • How and where the purchase was made: Merchant name and store URL
  • Proof that the product was received or used by the cardholder

Digital goods:

  • Cardholder details: name and shipping address
  • Details of purchase: list of products purchased
  • How and where the purchase was made: Merchant name and store URL
  • Any log showing that the website or application was accessed by the customer on or after the transaction date
  • Any log showing that the product was downloaded or received by the customer including date and time they were downloaded

Services:

  • Cardholder details: name and shipping address
  • Details of purchase: list of products purchased
  • How and where the purchase was made: Merchant name and store URL
  • Proof that the service has been provided to the cardholder

Note: Disputes can sometimes be difficult to overturn for digital goods. For this reason, we do recommend merchants to enable 3-D Secure to reduce fraud.

Once a dispute has been initiated, the transaction can no longer be refunded. We do encourage you to refund a charge whenever necessary before a dispute is open, to avoid the hassle and prevent your dispute rate from growing. When you lose a dispute your reputation level drops. Banks force us to take action on accounts with high level of chargebacks or fraud.

Related articles:
How do I manage a dispute?
If my customer has withdrawn the dispute, do I still need to provide evidence?
Tips to Minimise Disputes and Chargebacks