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What is a dispute?
A dispute occurs when a cardholder or card issuer challenges a payment transaction. There are four different types of disputes: Chargebacks, Retrieval Request, Compliance and Good Faith Collections.
Chargebacks are the most common type of disputes. With a chargeback, the issuing bank charges all or part of the transaction amount back to the acquirer/processor because the issuer believes the transaction has violated a Payment Card Networks rule or regulation. The acquirer/processor, in turn, charges this amount back to the merchant's business account.
Common reasons for disputes
- Fraud: The transaction was deemed to be fraudulent.
- Cardholder: The product was defective, the service was "not as described" or the cardholder didn't receive the product or service.
- Processing: Errors were made in processing, like duplicate or incorrect charges.
- Authorization: No proper authorization was received from the card network before processing a payment.
Tips to avoid disputes
- Make sure the business name provided to us matches or is similar to what will appear on the cardholder's statement, so they recognize the charge.
- Respond promptly to retrieval requests and dispute notifications.
- Ensure sales drafts are safely stored and accessible to authorized employees for 180 days after the initial transaction date.
- Take authorization for the full transaction amount from the card network; don’t break it into smaller chunks before processing a payment transaction.
- Use Address Verification (AVS) and Customer Identity Verification (CIV) such as 3- or 4-digit CVV or CVC.
- Take advantage of fraud protection programs.
Online dispute management tools
Dispute Manager is an application available within Commerce Control Center that allows you to review, manage and respond to payment disputes and chargebacks online.
Dispute Manager Light is a version of this application available within Clover Dashboard for Clover device users that supports basic dispute management features.
For more information about disputes, review the Guide to Processing Card Payments.
Existing merchant customers:
Call 1-800-451-5817 for live, U.S.-based service, 24/7. Or contact your account manager.
