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Disputed Payments

Participant disputes a charge to their bank

Never a fun topic...but one that occasionally comes up!
 
What is a disputed payment? How do disputes work?

A dispute (also known as a chargeback) occurs when a cardholder questions your payment with their card issuer. The card issuer creates a formal dispute which immediately reverses the payment. The payment amount, along with a separate dispute fee levied by the card network, is deducted from your account balance. If the dispute is found in your favor, the disputed amount is returned back to you. If a dispute is upheld, the card issuer’s decision is final and the cardholder’s payment remains refunded. Please note that the full lifecycle of a dispute, from initiation to the final decision from the bank, can take as long as 2-3 months to complete.

 

As a director, what steps should you take when a disputed payment arises?

  1. It is recommended to first contact the customer, preferably via email, to inquire about the reason for the dispute or if it was accidental. If the dispute was accidental, kindly suggest that they contact the number on the back of their credit card to remove the dispute.
  2. If you are certain that you do not wish to issue a refund (even if the customer claims they have withdrawn the dispute), we are here to assist by submitting evidence to the banks on your behalf once you inform us. It's important to note that the dispute process is not within our direct control (it involves communication between your bank and the cardholder's bank), but we are more than willing to provide supporting evidence. This process can be lengthy, sometimes taking 4-8 weeks to reach a resolution.
  3. If you had intended to issue a refund, but the customer filed a dispute too quickly, we can choose to "accept" the dispute without submitting any evidence on your behalf. In the event of losing or accepting a dispute, the customer's payment will remain refunded, and there may be a $15 dispute fee charged by Stripe. It is advisable to communicate with customers before they escalate to disputing a payment to avoid these situations.

Here's a video from Stripe explaining the process: