Understanding Charge Disputes
Last updated
Last updated
Cardholders should protest charges when they identify unauthorized, incorrect, or unjustified transactions on their accounts. Examples include fraudulent charges, incorrect transaction amount errors, duplicate payments, or charges for services or products that were not received or as described. Once a charge is protested, the dispute process starts, requiring merchants to provide supporting evidence.
Understanding the dispute lifecycle can be complex, but Clearent’s new reporting simplifies access to this information. It provides merchants with clear insights into status changes, making dispute management easier and more efficient.
The dispute lifecycle outlines the series of steps taken to resolve a disagreement over a charge. It begins when a customer identifies a potential issue with a transaction and raises it with their issuing bank. The bank reviews the claim and notifies the merchant, who is allowed to provide evidence supporting the legitimacy of the charge.
This process involves multiple stages, including investigation, evidence submission, and decision-making by the bank or payment network.
Xplor follows this standard pattern to navigate the dispute lifecycle efficiently:
Cardholder disputes a transaction with the issuing bank.
The issuing bank requests additional transaction details from the merchant, who responds with relevant information.
Visa card does not support retrieval requests; it only processes chargebacks.
Xplor reverses the payment and provides a temporary credit to the cardholder account.
Merchant Portal notifies the Merchant of the Dispute with an entry on the New Activity tab of the Disputes dashboard.
A notification email is sent to the specific merchant through the configured endpoint URL.
The Merchant can accept or reject the Dispute.
If the merchant accepts the Dispute, the chargeback amount is credited to the cardholder account permanently.
If the merchant rejects the Dispute, they must provide supporting evidence to the issuing bank, showing the charge is legitimate.
Issuing bank reviews the evidence and makes a decision.
If the issuing bank accepts the evidence, the cardholder’s credit is reversed, and the issuing bank returns the dispute amount to the Merchant.
If the issuing bank rejects the merchant’s dispute evidences, the cardholder retains the credited dispute amount permanently.
The Issuing Bank escalates the dispute to pre-arbitration or arbitration upon a request from the Merchant or Cardholder.
The card network reviews the case, makes a final ruling, and imposes additional fees on the losing party.
