FAQ: Disputes

What is a Dispute?

A Dispute is the reversal of a sale transaction that arises from a processing technicality, a customer dispute or fraudulent activity. All Disputes are 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 about avoiding Disputes, click here.


Why Did I Receive a Dispute?

Here are some of the most common reasons why disputes happen. Your customer:

  • Did not receive a product or service
  • Does not recognize the charge or payee on his or her credit card statement
  • Believes the product or service was defective, damaged or not as it was described
  • Was a victim of fraud – his or her credit card was stolen or used without consent
  • Duplicate transaction


How Does a Dispute Get Generated?

Once a customer realizes there is a problem with his or her transaction:

  1. Your customer 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 it is considered unreasonable, then the customer is responsible for the payment and your settlement funds are not impacted.
  3. If your customer appears to have a reasonable claim, the issuer will make a temporary credit payment to your customer and begin the dispute process.
  4. During the dispute process, the card issuer will obtain funds from the respective payment brand, who in turn debits the funds from us. We, in turn, will debit the funds from your settlement account.
  5. You will then receive documentation that notifies you about this dispute, or we open a case in the free online dispute management system, if your business subscribes.


How Will I Receive a Dispute?

You can receive disputes in either one or two ways. If you choose to use our free interactive dispute management system, you can manage disputes and retrievals online. You can view and respond to inquiries, dispute or accept disputes, and fulfill retrieval requests. You can even 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 instantly
  • Minimize paper processing and mailing costs

To subscribe and learn more about the free online dispute management system, click here or contact Client Services.

If you get a dispute, and you do not subscribe to our free online dispute management system, you should receive a Dispute Document from us via fax or mail. This document informs you that a debit has been made to your business checking account and gives you the option of accepting or contesting the adjustment. If contesting the adjustment, you will be required to respond by providing all specified information requested on the Dispute Response form.

Note: The debit (removal of funds from merchant account) occurs upon receipt of the dispute, but this document does not generate until the dispute has a status of "return to merchant (RTM)."


How Do I Dispute a Dispute?

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 free 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 using the fax number or 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 dispute funds may be returned to your account.

If you do not fill out and submit this documentation within the timeframes associated to the reason code, then the dispute automatically moves forward unchallenged and the dispute funds will not be returned to you.


How Can I Prevent Disputes?

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:

  • Never alter a sales receipt.
  • Always obtain an authorization for the exact amount of the transaction processed to the card.
  • If authorization is declined for the full amount of the sale, don't try to get an authorization by "splitting" or lowering the amount of the transaction.
  • If you can't get a single authorization for the full amount of the sale, then decline the credit card transaction and request another form of payment.
  • Whenever a card does not successfully swipe and you have to key in a transaction, manually imprint the card and ensure the signature and all transaction information is transferred to the imprinted draft. Make sure the manual draft is imprinted with the merchant name and location, or submit the card verification data (CVD) code with the authorization (3-digit code on back of credit card). Also, always process a chip card using a POS terminal capable of reading, communicating and processing transaction data from the card.
  • When a customer is due a credit and the original sale was made on a credit card, process the credit back to the original card number instead of refunding by check or cash. If a credit is due on more than one sale, then process each credit individually.
  • For debit processing, when a customer is due a credit and the original sale was made on a debit card, process the return back to the original debit card instead of refunding by check, cash or credit card. If a credit is due on more than one sale, then process each credit individually.*
    *Dependent on merchant set-up
  • 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
  • Respond to all retrieval requests with valid, legible documentation (see this information in the How do I Find Retrieval section below).
  • If the card is present at the time of sale, be sure to compare the credit card account number on an electronically printed draft to the credit card number embossed on the credit 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.


What is a Reason Code?

Each dispute and retrieval request bears a reason code, established by the payment brands. This value reflects why the request or dispute was initiated. The reason code is accompanied by its description on your dispute documentation.


How Do I Find Retrievals?

With card-not-present transaction types, an auto-response to Visa and MasterCard retrievals occur on the client's behalf. If you're using the free online dispute management system, you can electronically view and respond to retrievals, which are the issuer's requests for additional information about a transaction, usually on behalf of the cardholder. Issuers have the right to initiate a dispute if the response to a retrieval requests 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 us 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 the initiation of a dispute.


Why Have I Received Multiple Retrieval Requests for the Same Transaction?

Retrieval requests are system-generated. The first notification is sent to you at the very beginning of the process. The second notification follows on the seventh day and the third on the fourteenth day. Even though you may have already responded, the notification will be generated until the retrieval has been reviewed by one of our dispute analysts. The analysts work diligently to review the response, but it may take a few days due to the volume.

If you subscribe to the free online dispute management system, you can electronically view the first request, due to the tool's operational efficiencies.


What Happens After I Fax My Documentation?

Once we receive your faxed dispute or retrieval response documentation, it is assigned to the queue of a dispute analyst. They review each fax in the order received and it can sometimes take a day or more, depending on case volume.

If you subscribe the free online dispute management system, you can check on the case status and review submitted documents online 24/7.


Why Was Money Taken Out of My Account?

When a cardholder disputes a transaction, the issuing bank credits the cardholder, the payment brands credit the issuer, we credit the payment brands and that same amount is debited from your merchant account. Learn more about preventing disputes.


I See Evidence of a Dispute in My Reporting or on My Statement – Why Haven't I Received Documentation?

dispute. Dispute documentation is then generated upon disposition of the dispute, which could follow several days later. If you suspect 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.

Disputes can cost you time and money – subscribe to our free online dispute management system to guarantee that you have quicker access to your dispute and retrieval details.


Why Didn't I Receive More Time to Dispute the Dispute?

Time frames for dispute resolution are established by the payment brands. For Discover, MasterCard and Visa transactions, the acquirer has 45 days to respond to the dispute. We set the client's "Due Date" at 39 days to allow adequate time for review by an analyst. To meet these aggressive time frames, we recommend using our free online dispute management system to ensure you don't miss a deadline.

For Debit Disputes response time is 10 days.


How Do I Get Set-Up for the online dispute management system?

  • To request access to the free online dispute management system through your Merchant Services reporting application, 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.