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Dispute and chargeback support

 

Disputes and chargebacks can be a challenge for any business. Whether due to fraud, misunderstandings or customer dissatisfaction, handling then efficiently is key to protecting your revenue and maintaining trust with your customers.

 

This will guide you through what disputes are, how to prevent them and what steps to take when they happen, so you can focus on running your business with confidence.

What do I need to know about payment disputes?

 

Mitigate payment disputes by understanding their impact on your business.

What is a dispute?


A dispute is when a customer challenges a transaction with their bank.

Why do customers dispute payments?

 

Common reasons:

  • Fraud
  • Product not received
  • Billing errors

How does this affect your business?

 

Negative impact:

  • Chargeback fees
  • Revenue loss
  • Reputation risk

What are the best practices for dispute management?

 

Efficiently handle disputes by following these best practices:

  • Stay organized: Keep thorough records of transactions and customer interactions
  • Respond promptly: Time is critical in disputes. Submit evidence within the required deadlines
  • Communicate transparently: Keep customers informed about the status of their dispute and resolution steps

Disputes FAQs

 

The following FAQs will answer your most common questions about disputes management and provide you with actionable tips to help protect your business.

A dispute happens when your customer questions a transaction with their bank. The bank then reviews the transaction and may contact you, the business, to provide supporting information or evidence.

A chargeback occurs when your customer disputes a transaction and the bank decides that the payment should be reversed, the amount is then returned to the customer. Chargebacks may also include processing fees and additional processing fees for your business.

Disputes can occur for many reasons, including:

  • Items not received
  • Product not as described
  • Duplicate transactions or billing errors
  • Recurring charges after cancellation
  • Fraudulent or unauthorized charges

Feature Refund Chargeback
Who initiates it? Your business Your customer
Why does it happen?
  • Dissatisfaction
  • Order cancellation
  • Goodwill
  • Products not received
  • Billing errors (duplicate charges)
  • Unauthorized transactions
  • Fraud
What is the process? You voluntarily return the funds to your customer’s original payment method The bank temporarily withholds the transaction amount while investigating the dispute, then issues a chargeback if the claim is valid
What is the resolution time? Usually faster since you control the refund process Can take weeks or months, depending on the dispute investigation and required documentation

Chargebacks don’t just affect your revenue. They can impact your reputation and payment processing capabilities. High chargeback rates can lead to higher fees or even account termination.

Yes. If you win a dispute, we will return the disputed amount minus the processing fees. 

To determine whether a chargeback is valid, carefully review:

  • The reason code provided by the issuing bank (Go to the Causes and risk factors section to get a deep understanding of reason codes)
  • Any supporting documentation from the customer or card issuer
  • If the chargeback is related to fraud, for example, check if the cardholder’s details were correctly entered and if the customer could have been involved in the transaction.

Chargeback fees are penalties applied by your payment processor when a chargeback occurs. These fees can add up quickly, especially if you receive multiple chargebacks. To minimize these fees:

  • Focus on reducing your chargeback rate by improving customer satisfaction and monitoring for fraud
  • Be aware of your chargeback thresholds, as a high rate can lead to higher fees or even account termination

If you are seeing multiple chargebacks for the same reason, it’s important to take a closer look at the issue to prevent it from happening again. Here are a few steps to help reduce chargebacks:

  • Review your transaction details: Ensure that product descriptions, prices, and shipping information are clear and consistent across all channels
  • Enhance customer service: Quickly address customer concerns and provide clear communication to resolve issues before they lead to chargebacks
  • Leverage Chase’s fraud prevention tools: We offer a range of fraud detection tools, including fraud alerts and account monitoring, to help identify and prevent unauthorized transactions. Discover more about our fraud prevention tools here

By implementing these strategies and using our resources, you can better manage chargebacks and protect your business.

A retrieval request also known as a soft chargeback, is when Discover or American Express ask you for more information about a transaction before initiating a chargeback. This request does not immediately reverse the funds but serves as a way for the bank to gather details and determine if a dispute is necessary.

To properly respond to a retrieval request, you should provide:

  • A clear copy of the transaction receipt 
  • Proof of customer authorization (e.g., signature, consent for recurring billing) 
  • Any relevant order details (shipping confirmation, invoices, or email communications)

Providing accurate and timely information can help prevent a chargeback before it happens. If the information satisfies the issuer, the dispute process may end there, avoiding financial and reputational damage to your business

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