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Disputes FAQ
Sometimes referred to as a "disputed charge"
A dispute is the reversal of a sale transaction that arises from a processing technicality, a cardholder dispute or fraudulent activity. Disputes may result from violations of the rules and regulations established by a payment brand, such as Visa®, MasterCard® or debit network.
Disputes are something every business wants to avoid, as they can result in lost revenue.
To learn more, click here.
1. The cardholder contacts their issuer (the bank that stands behind the card), explains the problem and asks for their money back.
2. The issuer researches the accuracy of the claim.
• If the claim is considered unreasonable, then the cardholder is responsible for the payment and the settlement funds are not impacted.
• If the cardholder appears to have a reasonable claim, the issuer begins the dispute process.
3. During the dispute process,
• The issuer credits the cardholder, and notifies the payment brand (e.g., Visa®, Mastercard® or the debit network).
• The payment brand sends funds back to the card issuer to cover the dispute.
• Chase, in turn, debits the funds from your settlement account.
• Chase will send documentation about the disputed charge (which requires a timely response), or opens a case in the Online Dispute Management System, if your business subscribes.
You can receive disputes via email, fax, or mail. If you choose to use our interactive Online Dispute Management System, you can manage disputes and retrievals online. You can view and respond to inquiries, decline or accept disputes, and fulfill retrieval requests. You can also upload scanned sales receipts and/or other documentation.
The Online Dispute Management System enables clients to:
• Simplify dispute management with an easy to use online system
• Reduce manual processing by uploading dispute documents online
• Minimize paper processing and mailing costs
To subscribe and learn more about the Online Dispute Management System, you can call Client Services at 1-800-934-7717.
If you receive a dispute and do not subscribe to our Online Dispute Management System, you’ll receive a Dispute Document from us via mail or fax. This document informs you that a debit has been made to your business checking account and gives you the option to accept or contest the adjustment. If you decide to contest the adjustment, you will be required to provide all specified information requested on the Dispute Response form. This response form and necessary documentation should be emailed to chase-cb@chase.com or faxed to the number found on the dispute documentation.
Note: The debit (removal of funds from merchant account) occurs upon receipt of the dispute, but the Dispute Response form does not generate until the dispute has a status of “RTM” (Return to Merchant).
When we receive a dispute from the issuing bank, we first look at our own records to try to resolve the dispute automatically. If we do not have the necessary information, the dispute will receive a status of "Return to Merchant" and we will send you a Dispute Document if you manage your disputes manually. If you subscribe to our Online Dispute Management System, the process can be managed electronically, saving you time and money.
Complete the Dispute Document with as much information as you have available, and return it to our Dispute Department. You can return it to us by one of the following methods:
• Email it to Chase-cb@chase.com
• Fax it to the number found on the form
• Mail it to the physical address on the form
If you fill out and submit this documentation, the analyst will review your rebuttal to ensure compliance with the payment brand rules and regulations. If your response is consistent with the rules and regulations, then the dispute is represented for review by the payment brands, and the disputed funds may be returned to your account.
If you do not fill out and submit this documentation within the required timeframe, then the dispute automatically moves forward unchallenged and the disputed funds will not be returned to you.
Disputes can cost time and money – while some disputes cannot be prevented, many can with comprehensive employee training.
The best way to prevent disputes is to establish best practices at the time of sale that are followed consistently by all employees. Here are some tips:
Authorizations:
• Each transaction requires a unique authorization code, do not use the same code for multiple transactions.
• Always obtain an authorization for the exact amount of the transaction processed to the card.
• If the authorization is declined, do not try to split or lower the amount of the transaction, ask for another form of payment.
Transactions:
• Never alter a sales receipt.
• Avoid manually keying in card numbers if you have a chip or swipe card reader.
• Always process a chip card using a POS card reader capable of reading, communicating and processing transaction data from the card.
• If the sale is being conducted in-person, make sure your return policy is pre-printed on the credit or debit card sales receipt and signed by the cardholder at the time of the original sale.* The refund policy must be close to the cardholder's signature to be recognized by the payment brands.
* Signature may not be required for PIN Debit
• If the card is present at the time of sale, always compare the cardholder's signature to the signature on the back of the card. If the signature panel is blank, then ask the cardholder to sign it. If the cardholder refuses, then you should request another form of payment.**
**Signature may not be required for PIN Debit
• If the card is present at the time of sale, be sure to compare the credit or debit card account number on an electronically printed draft to the credit or debit card number embossed on the card. If the numbers don't match, call your Automated Voice Authorization Center and tell the operator that you have a "Code 10" authorization and that the card numbers do not match.
• For ecommerce sites, it's recommended that all transactions be reviewed for address verification results and that CID be required.
Credits:
• Always process a refund back to the original credit card or debit card number.***
• Do not refund a credit card sale or debit card sale by check or cash. ***
• If credit is due on more than one sale, process each credit individually to the original credit card or debit card number.***
***Dependent on merchant set-up for Debit Card
If you’re using the Online Dispute Management System, you will find the dispute reason codes on both the Level 1 and 2 screens. These codes are established by the payment brands to categorize the incoming dispute requests by reason.
The codes also appear on financial reporting associated with disputes. Below are some examples of more common dispute reason codes.
Reason Code |
Description |
10.4 |
Other Fraud – Card-Absent Present Environment |
37 |
No Cardholder Authorization |
13.2 |
Cancelled Recurring |
41 |
Cancelled Recurring Transaction |
63 |
Cardholder Does Not Recognize — Potential Fraud |
13.7 |
Cancelled Merchandise/Services |
13.3 |
Not as Described or Defective Merchandise/Services |
53 |
Not As Described |
60 |
Credit Not Processed |
13.1 |
Merchandise/Services Not Received |
With card-not-present transaction types, an auto-response to the payment brand for the retrieval request occurs on the client's behalf. If you're using the Online Dispute Management System, you can view and respond to retrieval requests online. (The issuer requests additional information on a transaction, usually on behalf of the cardholder.) Issuers have the right to initiate a dispute if the response to a retrieval request is not timely, legible or valid. So, it's in your best interest to respond to a retrieval request promptly and with as much detail as possible.
Clients who process their disputes manually may receive a paper Retrieval Request Notification or a Retrieval Activity Report from Chase Merchant Services for card-present or all Discover transactions. If you receive one, you'll want to review it carefully and provide the sales receipt before the due date to prevent a dispute from being initiated.
Retrieval requests are system-generated. The 1st notification is sent to you at the beginning of the process. The 2nd notification follows on the seventh day, and the 3rd notification on the fourteenth day. Even though you may have already responded, the notification will be generated until the response to the retrieval request has been reviewed and processed in the system, which will be 24-48 hours after receipt.
If you subscribe to the Online Dispute Management System, you can view the first request online.
Once we receive your faxed dispute documentation, it is assigned to the Sequence # in the Online Dispute Management System and assigned to a dispute analyst for review. Documents are reviewed in the order received and will take 48-72 hours to be added to the Sequence #.
If you subscribe the Online Dispute Management System, you can check on the case status and review submitted documents 24/7. If you don’t subscribe, you can contact the Disputes Department at the number found on your documentation.
When a cardholder disputes a transaction, the following takes place:
• The issuing bank credits the cardholder
• The payment brand credits the issuer
• Chase credits the payment brand and debits the same amount from your merchant account
Dispute documentation is generated when the status is changed to “RTM” (Return to Merchant). If you're not receiving the appropriate forms, you should verify your mailing address or fax number with Client Services to ensure we have up-to-date and accurate contact information.
Timeframes for dispute resolution are established by the payment brands.
• For Visa Allocation reason codes (RC 10.1 to RC 11.3), the acquirer has 18 days to respond to the dispute
• For Visa Collaboration reason codes (RC 12.1 to RC 13.9), the acquirer has 24 days to respond to the dispute
• For MasterCard, the acquirer has 45 days to respond to the dispute
• For Discover and JCB, the acquirer has 43 days to respond to the dispute
• For Debit disputes, response time is 10 days
To meet these aggressive timeframes, we recommend using our Online Dispute Management System to ensure you don't miss a deadline.
To request access to the Online Dispute Management System, please contact Client Services at 1-800-934-7717. To ensure the security of your sensitive data, account verification and contact authentication will be required.
How to Get Help
If you have a question about fees or need general support for your existing processing account, you can call Client Services at 1-800-934-7717.