What is a Dispute?
A dispute arises when a customer initiates a chargeback with their bank or credit card issuer. This occurs when a customer reaches out to their bank directly to lodge a formal dispute claim.
However, a dispute can be overturned by the customer’s bank if they receive enough information showing that the chargeback isn’t justified. When the bank or issuer finds the dispute in the merchant’s favor, the merchant is refunded the disputed amount that had been withdrawn, including the chargeback fee. Hence, the merchant needs to provide relevant evidence to resolve the dispute in his/her favor.
Below is a list of common reasons for, and types of disputes within TradeGecko Payments.
Common Reasons for Disputes
- Lost or stolen cards
- Card charges claimed to not have been made by cardholders
- Lost purchases
- Products defective or damaged
- Canceled transactions but not yet refunded
- Duplicate card charges
Common Types of Disputes
- Fraudulent
- Unrecognized
- Product not received
- Product unacceptable
- Credit not processed
- Duplicate
- General
Fraudulent
➔ What it means: The owner of the card says that they didn’t authorize the charge. This is the most common reason for a dispute and can happen if the card was lost or stolen. It can also happen if the cardholder doesn’t recognize the charge as it appears on the billing statement from their bank.
✅Resolution process: First, try to get in touch with the cardholder. Sometimes people forget about the charges they make. It’s also possible that it might have been someone they authorized to use the card – for instance, their spouse made the charge and they were unaware of it at the time. If this is the case, ask them to let their bank know that they want to drop the dispute. Getting the cardholder to close the dispute from their end is by far the best way for the merchant to make sure a dispute is resolved in the merchant’s favor. If the cardholder agrees to resolve the dispute, the merchant should still submit evidence for the dispute. The evidence should include a statement that the cardholder said they would withdraw the dispute (including the email if the merchant corresponded by email).
Unrecognized
➔ What it means: The customer doesn’t recognize the charge appearing on their card statement. This could be a fraudulent case too.
✅Resolution process: Try to get in touch with the customer. Sometimes people forget about the charges they make. It’s also possible that it might have been someone they authorized to use the card – for instance, their spouse made the charge and they were unaware of it at the time. If this is the case, ask them to let their bank know that they want to drop the dispute. Getting the customer to close the dispute from their end is by far the best way for the merchant to make sure a dispute is resolved in the merchant’s favor. If they agree to do this, the merchant should still submit evidence for the dispute.
Product not received
➔ What it means: The customer says they did not receive the products or services purchased.
✅Resolution process: First, get in touch with the customer. Understanding why they filed the dispute is important in helping to make sure that the customer gets the product and will give the merchant critical information to prevent this from happening to other customers. If the merchant is able to resolve the issue with the customer, getting the customer to close the dispute from their end is by far the best way for the merchant to make sure a dispute is resolved in the merchant’s favor. If they agree to do this, the merchant should still submit evidence for the dispute. The evidence should include a statement that the cardholder said they would withdraw the dispute (including the email if the merchant corresponded by email), as well as the evidence such as digital logs, proof that the customer accessed the purchased product, documentation proof that a service was provided e.g. copy of the contract or any form of a written agreement, shipping or delivery documentation such as shipping tracking number that matches the billing address.
Product unacceptable
➔ What it means: The product or service was received but was defective, damaged, or not as described.
✅Resolution process: First, get in touch with the customer. If the merchant is aware of why the customer is dissatisfied, there is a chance for the merchant to explain the misunderstanding or to make it right. If the merchant is able to resolve the issue with the customer, getting them to close the dispute from their end is by far the best way for the merchant to make sure a dispute is resolved in the merchant’s favor. If the customer agrees to do this, the merchant should still submit evidence for the dispute. The evidence should include a statement that the cardholder said they would withdraw the dispute (including the email if the merchant corresponded by email), as well as the evidence like any logs, documentation or tracking numbers. If the customer made no attempt to return the product or cancel the service, or if the merchant provided a replacement product or service, make sure to note that as well.
Credit not processed
➔ What it means: The customer says that the purchased product was returned or the transaction was otherwise canceled, but the merchant has yet to refund or credit the customer.
✅Resolution process: Get in touch with the customer. If the merchant understands what the complaint is, there is a chance for the merchant to explain the misunderstanding or to make it right. If the merchant is able to resolve the issue with the customer, getting them to close the dispute from their end is by far the best way for the merchant to make sure a dispute is resolved in the merchant’s favor. If the customer agrees to do this, the merchant should still submit evidence for the dispute. The evidence should include a statement that the cardholder said they would withdraw the dispute (including the email if the merchant corresponded by email).
Duplicate
➔ What it means: The customer says the merchant charged their card multiple times for the same product or service.
✅Resolution process: Determine if the customer was incorrectly charged multiple times. If they were, the merchant should accept the dispute. It is not possible to issue a refund once a charge has already been disputed.
If there were two or more separate transactions, get in touch with the customer. If the merchant understands what the complaint is, there is a chance for the merchant to explain the misunderstanding or to make it right. If the merchant is able to resolve the issue with the customer, getting them to close the dispute from their end is by far the best way for the merchant to make sure a dispute is resolved in the merchant’s favor. If they agree to do this, the merchant should still submit evidence for the dispute. The evidence should include a statement that the cardholder said they would withdraw the dispute (including the email if the merchant corresponded by email).
General
➔ What it means: This is an uncategorized dispute. Since these are most commonly fraudulent, TradeGecko Payments recommend following the suggestions listed for that type.