Use Case: Respond to a Dispute

You can quickly identify and respond to a chargeback using the Portal if one of your customers initiates a dispute. This tutorial will walk you through the steps to respond to disputes, explains the different stages of the dispute process, and provides options for how you can choose to respond during any dispute that arises.

Objective

Respond to a chargeback dispute during an applicable stage in the chargeback cycle.

Audience

Merchants

Environment

Portal (Sandbox)
Portal (Production)

Prerequisites

Prerequisites:

You must have a fully boarded Payrix account to perform any of the actions described in the use case guides.
A dispute has been opened against you by your customer/their issuing bank.

Warnings

Warnings will provide insight or advice to avoid risk, visibility, and product performance issues during this use case.

Warning: A decision made during any stage of the dispute process must be reviewed by card brands. The amount of time to review a decision varies and may result in a lengthy review process.

Warning: Each step of this use case is only predicated on the one before it, the status that it resulted in, and the cardholder's (customer's) next actions.

Warning: You will have a limited amount of time to respond during each stage of the dispute process. The due date for each of your responses is displayed in the Response By column on the Disputes page and below the Dispute Tracker on the Dispute Details page.

Failure to respond by the due date may result in the dispute being awarded automatically to the cardholder.

Additional Resources

Before getting started, expand each of the sections below to review Dispute category definitions.

Dispute Stages:

Click here to view the different dispute stages and their definitions.

Dispute Created: A customer is disputing a transaction from your business.
Retrieval: The customer’s card brand (e.g. Visa) will contact you to request evidence about the validity of the transaction. Your available actions include uploading requested evidence or accepting liability. See the guide below this section for more information about available options.
First Chargeback: Either the evidence provided during retrieval was not submitted, was insufficient, or the dispute did not meet the criteria to be a Retrieval and was initiated as a First Chargeback. Your available actions include representment (uploading additional evidence) or accepting liability.
Pre-Arbitration: In the event that you win the first chargeback, the customer may submit new evidence to pursue a second chargeback, also known as pre-arbitration. Your available actions include viewing the pre-arbitration statement from the cardholder and awaiting a new decision. In this round, a Merchant can accept or decline the arbitration case, and submit additional documents to pursue the case further.
Arbitration: If you win the pre-arbitration phase, the customer may choose to further escalate the dispute by moving to arbitration. The platform will show the Chargeback has reached Arbitration, and the card brand will decide in favor of a party in the dispute arbitration for a fee determined by the card brand. No action is available at this stage.

Dispute Actions:

Click here to view the types of dispute actions.

Upload Evidence: Supply evidence to the card brand.
Accept Liability: Accept responsibility for the dispute and lose the funds.
Await Dispute Decision: No action. Wait for the card brand to respond to the latest actions or evidence.

Dispute Decisions:

Click here to view the potential dispute decisions.

Won: The card brand decides in your favor during any phase of the dispute resolution process. If you win the dispute, the funds will be credited back to your account.
Lost: The card brand decides in favor of the cardholder during any phase of the dispute resolution process. If you lose the dispute, the funds will be debited from your account.
{Next Step}: The previous status and action have resulted in a continuation of the dispute from the cardholder.

Dispute Key Terms:

Click here to view dispute key terms.

Cardholder: The customer that is disputing a transaction.
Merchant: The business that provided the goods or services being disputed.
Issuing Bank: The bank that issued the card to the customer (i.e. the cardholder’s bank).
Card Brand: The card brand that is associated with the customer’s card (i.e. Visa, Mastercard, American Express, etc.).
Representment: The response a Merchant sends to the issuing bank when a transaction is disputed.

For more information about chargebacks, disputes, and response options, visit the Dispute Management section.

Respond to a Dispute

1. Access the Dispute Details Page

When a new dispute is created, you will receive a notification via your email. Click the link to go to the Dispute Details page. Alternatively, you can click DISPUTES in the left-hand navigation panel to open the Disputes page, then find the dispute in the table and click DISPUTE DETAILS to open the Dispute Details page.

2. View the Dispute Stage

The Dispute Details Tracker is displayed at the top of the Dispute Details page. The current status of your dispute is displayed here (see Prerequisites for more information about Dispute Stage).

3. Retrieval

During retrieval, you have the option to submit evidence against the dispute, or accept liability.

Click here to view steps to submit evidence against the dispute.

Step 1: From the Dispute Details Tracker, click UPLOAD EVIDENCE to open the File Upload lightbox on the page.
Step 2: Click UPLOAD FILE to open a system file upload window, or drag and drop the document or image into the designated area.
Step 3: Click UPLOAD to send the evidence to the card brand.

Result: Await a dispute decision from the card brand. If the dispute is decided in your favor, the Dispute Details Tracker will display “Won”, and the disputed funds will be credited to your account. Note that the customer may choose to pursue further action (see the next section). If the decision is “Lost”, the disputed funds will be debited from your account back to the customer.

Click here to view the steps to accept liability for the dispute.

Step 1: Click ACCEPT LIABILITY in the Dispute Details Tracker to open the Accept Liability lightbox on the page.
Step 2: Click CONFIRM to accept liability for the dispute.

Result: The Dispute Details Tracker will display “Lost”, the disputed funds will be debited from your account back to the customer, and the dispute will be closed.

4. First Chargeback

If the evidence provided during Retrieval resulted in a decision in your favor, the cardholder has the option to continue to dispute the charge. If this happens, you have the option to submit additional evidence, known as representment, or you can accept liability.

Click here to view steps to submit evidence against the dispute (Representment).

Step 1: From the Dispute Details Tracker, click UPLOAD EVIDENCE to open the File Upload lightbox on the page.
Step 2: Click UPLOAD FILE to open a system file upload window, or drag and drop the document or image into the designated area.
Step 3: Click UPLOAD to send the evidence to the card brand responding to the first chargeback.

Result: Await a dispute decision from the card brand. If the dispute is decided in your favor, the Dispute Details Tracker will display “Won”, and the disputed funds will be credited to your account. Note that the customer may choose to pursue further action (see the next section). If the decision is “Lost”, the disputed funds will be debited from your account back to the customer.

Click here to view the steps to accept liability during the first chargeback.

Step 1: Click ACCEPT LIABILITY in the Dispute Details Tracker to open the Accept Liability lightbox on the page.
Step 2: Click CONFIRM to accept liability for the dispute.

Result: The Dispute Details Tracker will display “Lost”, the disputed funds will be debited from your account back to the customer, and the dispute will be closed.

5. Pre-Arbitration

Pre-arbitration is also known as a “Second Chargeback”. If the dispute is decided in your favor during the first chargeback, the customer has the option to submit new evidence and re-open the dispute.

Step 1: From the Dispute Details Tracker, click UPLOAD EVIDENCE to open the File Upload lightbox on the page.
Step 2: Click UPLOAD FILE to open a system file upload window, or drag and drop the document or image into the designated area.
Step 3: Click UPLOAD to send the evidence to the card brand responding to the first chargeback.

Result: Await a dispute decision from the card brand. If the dispute is decided in your favor, the Dispute Details Tracker will display “Won”, and the disputed funds will be credited to your account. Note that the customer may choose to pursue further action (see the next section). If the decision is “Lost”, the disputed funds will be debited from your account back to the customer.

6. Arbitration

If Pre-Arbitration evidence is not sufficient, or if the cardholder chooses to continue the dispute, then the dispute will go to arbitration. In this case, you must accept arbitration and allow the card brand to handle the dispute arbitration for a fee determined by the card brand.

Next Steps

Once the dispute is resolved, review the following use case guides for additional information on related topics:

Process a Card Payment with Create Payments: Process a payment that includes Level 2 and Level 3 information using the Process a Card Payment with Create Payments page.
Process a Card Payment with Quick Charge: Process a payment that does not require Level 2 or Level 3 information using the Process a Card Payment with Quick Charge page.
Process an eCheck (ACH) Payment with Create Payments: Process a payment that includes Level 2 and Level 3 information using the Process an eCheck (ACH) Payment with Create Payment page.
Process an eCheck (ACH) Payment with Quick Charge: Process a payment quickly using the Process an eCheck (ACH) Payment with Quick Charge page.

Conclusion

Once the dispute is resolved, you will receive an email notification of the final dispute resolution status.

References

Click the links or items below to access any of the following pages: