Credit Card Dispute Process

A credit card dispute often leaves merchants with more questions than answers. Understanding the process is the first step in knowing how to fight chargebacks effectively.

The way this process plays out varies based on your bank and payment processor. However, there are similarities. Here is a list of the most frequently asked questions about the process:

1. Where can merchants go to get help with the credit card dispute process?
2. What is the VISA credit card dispute process?
3. What is the MasterCard credit card dispute process?
4. What is the American Express credit card dispute process?
5. What is the Discover credit card dispute process?
6. How do merchants win a credit card dispute?
7. What transaction information do merchants need in a credit card dispute?
8. When can consumers start a credit card dispute?
9. How do banks determine if a credit card dispute is legitimate?
10. What are the possible results of a credit card dispute?
11. Is it possible to be informed about credit card disputes in real time?
12. How can merchants reduce credit card dispute losses?

Where Can Merchants Go to Get Help with the Credit Card Dispute Process?

Many services exist to help merchants with credit card disputes. To learn more about the companies that can help with disputes, check out our business directory.

What is the VISA Credit Card Dispute Process?

1. Cardholder files transaction dispute with their bank
2. Cardholder bank sends dispute to merchant card processor
3. Merchant card processor forwards dispute to merchant
4. Merchant accepts or rejects dispute

You can also read VISA’s credit card dispute documentation.

What is the MasterCard Credit Card Dispute Process?

1. Chargeback initiated
2. Second Presentment
3. Arbitration

You can also read MasterCard’s credit card dispute documentation.

What is the American Express Credit Card Dispute Process?

1. Chargeback or Inquiry
2. Merchant Response
3. Reversal or Chargeback Stands

You can also read American Express’s credit card dispute documentation.

What is the Discover Credit Card Dispute Process?

1. Merchant responds to TRR
2. Attach image
3. Representment request
4. Merchant pre-arbitration response
5. Merchant arbitration response
6. Merchant arbitration request

You can also read Discover’s credit card dispute documentation.

How Do Merchants Win a Credit Card Dispute?

We put together a full guide to how to win a credit card dispute. But in short, merchants need to start by filing a Chargeback Rebuttal letter. It should include anything that will prove the transaction is valid. This includes:

• Sales Receipts
• Delivery Confirmations
• Communications with the purchaser, in any form
• Previous orders placed by the customer

In addition, all information must be placed in the context of the specific justification given for the Chargeback. This is indicated by the chargeback code. If you need help understanding or finding a code, see our list of all the chargeback codes used by Visa, MasterCard, Discover, and American Express.

What Transaction Information Do Merchants Need In a Credit Card Dispute?

Visa credit card dispute documentation recommends including the following information from sales receipts:

• Cardholder signature (if available)
• Suppressed Visa account number1
• Cardholder name
• Transaction amount
• Authorization code, if available
• Your business name and address
• All itemized charges

When Can Consumers Start a Credit Card Dispute?

Cardholders can file a chargeback based on four types of claims:

1. Fraud.
2. Authorization. This means authorization was either declined or not given before processing a transaction.
3. Processing error. This is a claim the wrong amount was billed, a promised refund was not provided, or that a recurring billing payment was charged without consent.
4. Consumer Disputes. This is a claim that received goods did not match what was ordered, or were damaged, etc.

How Do Banks Determine If a Credit Card Dispute Is Legitimate?

After the request is made and received, the card holder’s bank will review it and make a determination of its validity.

Unfortunately, this review process is rarely comprehensive. Banks will do the minimum to investigate, and will always side with the card holder unless there is clear evidence of friendly fraud or some other kind of abuse.

What Are the Possible Results of a Credit Card Dispute?

A dispute can end in three ways:

1. The merchant wins and the chargeback is cancelled
2. The card holder wins and the money is removed from the merchant’s account and sent back to the card holder
3. The merchant wins but is hit with a new claim due to a processing error in the original one, or the discovery of new information.

Is it Possible to Be Informed About Credit Card Disputes in Real Time?

No. Because the merchant’s bank must wait until the cardholder’s bank refuses payment at the end of the month, it’s impossible for merchants to find out about chargebacks until they receive their monthly statement.

How Can Merchants Reduce Credit Card Dispute Losses?

It’s important to realize chargebacks are a fact of life for merchants. Undeniably, the credit card dispute process doesn’t make dealing with them any easier.

In fact, given the high emotions of getting hit with a chargeback, merchants should always be aware to never over-compensate by declining too many orders. Ecommerce false declines can actually do just as much, if not more, harm to revenues.

Despite the frustration and pain caused by eCommerce fraud, merchants shouldn’t allow panic to create new problems. Ultimately, remaining vigilant and using the chargeback prevention solutions available is the best way to minimize the impact of a biased system on their bottom lines.