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Minimizing Disputes

Minimizing the number of Disputes received is crucial for a Merchant in the dynamic realm of commerce and e-commerce. Understanding the subtleties of dispute resolution not only safeguards your business but also fosters long-term trust with customers. Knowledge of how to avoid Disputes is invaluable for both card-present and card-not-present Merchant business types to not only protect their bottom line but also increase and maintain customer satisfaction with long-term, reliable, and seamless transactions fostering your positive reputation.

General Customer Service

These basic recommendations below can help you avoid more disputes and keep your customer experience outstanding overall:


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If the merchandise or service to be provided to the Cardholder will be delayed, advise the Cardholder in writing of the delay and the new expected delivery or service date.

Item Out of Stock

If the Cardholder has ordered merchandise that is out of stock or no longer available, advise the Cardholder in writing. If the merchandise is out of stock, let the Cardholder know when it will be delivered. If the item is no longer available, offer the option of either purchasing a similar item or canceling the transaction. Do not substitute another item unless the customer agrees to accept it.

Ship Merchandise Before Depositing Transaction

For card-not-present transactions, do not deposit transaction receipts with the merchant's acquirer until the merchant has shipped the related merchandise. If customers see a transaction on their monthly Visa statement before they receive the merchandise, they may contact their card Issuer to dispute the billing. Similarly, if delivery is delayed on a card-present transaction, do not deposit the transaction receipt until the merchandise has been shipped.

Requests for Cancellation of Recurring Transactions

If a customer requests cancellation of a transaction that is billed periodically (monthly, quarterly, or annually), cancel the transaction immediately or as specified by the customer. As a service to the merchant's customers, advise the customer in writing that the service, subscription, or membership has been canceled and state the effective date of the cancellation.

Merchant Policy Disclosures

Merchants are responsible for establishing and communicating their own policies on:

  • Returns and Exchanges

  • Refunds

  • Cancellations

  • Store-Credit Only Refunds

  • and more.

In addition to these policies, a clear policy disclosure statement help Cardholder avoid misunderstandings and potential disputes. Card Brands will support the merchant's policies if provided near a signature area, or be in an area easily seen by the Cardholder.

  • If the disclosure is on the back of the transaction receipt or in a separate contract, it must be accompanied by a space for the Cardholder's signature or initials.

  • Merchant's policies should be pre-printed on merchant's transaction receipts; if not, write or stamp the merchant's refund or return policy information on the transaction receipt near the customer signature line before the customer signs (be sure the information is legible on all copies of the transaction receipt).

Warning: Failure to disclose the merchant's refund and return policies at the time of a transaction could result in a dispute should the customer return the merchandise.

Card-Present Merchant Disclosures

The following disclosure statements are required by card brands to support the validity of transactions as a Merchant accepting credit and debit card payments in person:

Disclosure Statement


No Refunds or Returns or Exchanges

Merchant's establishment does not issue refunds and does not accept returned merchandise or merchandise exchanges.

Exchange Only

Merchant's establishment is willing to exchange returned merchandise for similar merchandise that is equal in price to the amount of the original transaction.

In-Store Credit Only

Merchant's establishment takes returned merchandise and gives the Cardholder an in-store credit for the value of the returned merchandise.

Special Circumstances

The merchant and the Cardholder have agreed to special terms (such as late delivery charges or restocking fees). The agreed-upon terms must be written on the transaction receipt or a related document (e.g., an invoice). The Cardholder's signature on the receipt or invoice indicates acceptance of the agreed-upon terms.


Merchants must provide full credit when a transaction receipt has been processed and the Cardholder has canceled the transaction within 14 calendar days of the transaction date.

Card-Not-Present Merchant Disclosures

The following disclosure statements are required by card brands to support the validity of transactions as an e-commerce Merchant accepting credit and debit card payments using a website or over the phone:

Card-not-Present Disclosure Statements


Phone Orders

For proper disclosure, the merchant's refund and credit policies may be mailed, emailed, or texted to the Cardholder. As a reminder, the merchant must prove the Cardholder received or acknowledged the policy for the disclosure to be valid. 

Internet or Application

Merchant's website must communicate its refund policy to the Cardholder in either of the following locations:

  • In the sequence of pages before final checkout, with a "click to accept" or another acknowledgment button, checkbox, or location for an electronic signature.

  • On the checkout screen, near the "submit" or click to accept button. The disclosure must not be solely on a link to a separate web page.

More Tips for Card-Present Merchants

Most disputes can be attributed to improper transaction-processing procedures and can be prevented with appropriate training and attention to detail. The following best practices will help merchants minimize disputes.

Merchants using payment terminals to accept card payments in person, such as retail stores and restaurants, should follow these recommendations when encountering the following scenarios:


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Declined Authorization

Do not complete a transaction if the authorization request is declined.

Expired Card

Do not accept a card after its "Good Thru" or "Valid Thru" date.

A chip card and the chip-reading device work together to determine the appropriate Cardholder or verification method for the transaction (either signature, PIN, or CDCVM). If the transaction has been PIN verified, there is no need for a signature.

Card Imprint for Key-Entered Card-Present Transactions

If, for any reason, the merchant must key-enter a transaction to complete a card-present sale, make an imprint of the front of the card on the transaction receipt, using a manual imprinter. Do not capture an impression of the card using a pencil, crayon, or other writing instrument. This process does not constitute a valid imprint.

Even if the transaction is authorized and the receipt is signed, the transaction may be disputed back to the merchant if fraud occurs and the receipt does not have an imprint of the account number and expiration date. This applies to all card-present transactions, including key-entry situations where the card presented is chip and the terminal is chip-enabled. When a merchant key-enters a transaction, an imprint is required regardless of the type of card and terminal capability.


Ensure that the transaction information on the transaction receipt is complete, accurate, and legible before completing the sale. An illegible receipt, or a receipt that produces an illegible copy, may be returned because it cannot be processed properly. The growing use of electronic scanning devices for the electronic transmission of copies of transaction receipts makes it imperative that the item being scanned be very legible.

Fraudulent Card-Present Transaction

If the Cardholder is present and has the account number but not the card, do not accept the transaction. Even with authorization approval, the transaction can be disputed and sent back to the merchant if it turns out to be fraudulent.

Card-Absent Merchants

Merchants should be using Address Verification Service (AVS) and Card Verification Value 2 (CVV2) Dispute Protection.


Merchant received an AVS positive match "Y" response in the authorization message and if the billing and shipping addresses are the same. Merchants will need to submit proof of the shipping address and signed proof of delivery.

Merchant submitted an AVS query during authorization and received a "U" response from a card Issuer. This response means the card Issuer is unavailable or does not support AVS.


Merchant submitted a CVV2 verification request during authorization and received a "U" response with a presence indicator of 1, 2, or 9 from a card Issuer. This response means the card Issuer does not support CVV2.

Merchant submitted a CVV2 verification request on a Mail/Phone Order Transaction or an Electronic Commerce Transaction during authorization and received an "N" response with a presence indicator of 1 from the card Issuer. The Issuer approved the transaction with the no-match response

Note: A Merchant can't deny a Cardholder the ability to dispute based on Fair Credit laws and Card Brand rules.

Sales-Receipt Processing

In addition to the general recommendations above, Sales Receipts can be a critical point of evidence in a Dispute. It is important to follow each of the recommendations below when processing a receipt of sale:


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One Entry for Each Transaction

Ensure that transactions are entered into point-of-sale terminals only once and are deposited only once. A merchant may get a dispute for duplicate transactions if the merchant:

  • Entered the same transaction into a terminal more than once.

  • Deposit both the merchant copy and bank copy of a transaction receipt with the merchant's acquirer.

  • Deposit the same transaction with more than one acquirer.

Proper Handling of Transaction Receipts

Ensure that incorrect or duplicate transaction receipts are voided and that transactions are processed only once.

Depositing Transaction Receipts

Deposit transaction receipts with the merchant's acquirer as quickly as possible, preferably within one to five days of the transaction date; do not hold on to them.

Timely Deposit of Credit Transactions

Deposit credit receipts with the merchant's acquirer as quickly as possible, preferably on the same day the credit transaction is generated.

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