When using Tekmetric Payments, disputes filed by customers can affect your payouts, so be sure to check out our Help Center article Disputes: What They Are & How to Handle Them.
What happens when a customer files a dispute?
Each card network has its own process for handling disputes between cardholders and merchants, but at a high level they're all similar.
When a customer files a dispute, the disputed amount plus the dispute fee is immediately pulled from your account balance until the card network reaches a decision. Neither Stripe nor Tekmetric plays any part in the dispute decision itself, but does provide tools to help you challenge the dispute to give you the best chance of winning.
The customer's bank makes the decision. This decision is final and binding for all parties involved.
Why were funds deducted from my account when a dispute was filed?
Since the card network debits Stripe for your disputed payment and related dispute fees when a chargeback is filed, Stripe in turn debits your balance. The funds are returned to your balance if you counter and win the dispute.
What should I do after I receive a dispute?
When you receive a dispute, you have to decide if you want to challenge it. Review the dispute and the dispute claim to decide if you think the dispute is valid. You also need to assess if you have evidence to counter the dispute. If you choose not to challenge it, you can ignore the dispute and do nothing, or explicitly accept the dispute. If you want to win a dispute, you must challenge it and submit evidence. Taking no action is treated as accepting the dispute.
What happens if I accept a dispute?
Accepting a dispute will immediately close the dispute as lost. Since acceptance signifies your agreement to the dispute, the funds are not returned to you.
For more information about accepting a dispute, see Stripe's Accepting Disputes FAQ.
Do I still need to submit evidence if my customer withdraws a dispute?
Yes. Some card issuers will treat failure to submit evidence as an acceptance of liability. To be safe, you should always submit evidence contesting the reason for the dispute.
How many times can I respond to or challenge a dispute?
You have just one opportunity to submit evidence, so it’s important to gather everything you need before submitting, since you can’t go back and add evidence once you’ve submitted
Who made the decision about my dispute?
Disputes are decided entirely by the entity who issued the cardholder's card. In some cases that's the card network itself (as with American Express) and in some cases that's an issuing bank (as with Mastercard or Visa).
The card network (such as Visa, Mastercard, or American Express) defines the dispute process -- the "rules of the road" for how disputes work. The issuer decides whether any given dispute is won or lost. In some cases (as with American Express) these are the same entity.
Stripe facilitates your participation in the dispute process by helping you select the best possible evidence for the dispute reason in the dashboard, and transmitting your evidence to the card network, but Stripe does not make any decision about your dispute.
Can I appeal my lost dispute?
No. The issuer's decision is final and cannot be appealed or challenged. Some card networks feature a dispute lifecycle phase called "arbitration" in which a loss can be appealed (for a substantial card network fee), but Stripe does not currently support this.
It may still be possible to have your customer withdraw the dispute, even after the dispute is closed.
Are there any other repercussions available if I lost a dispute?
While the issuer’s decision is final, you may have other legal options. See the examples below and consult with the proper professionals or governing bodies for your specific options.
- Take the Customer to Small Claims or Civil Court
- File a Police Report for Stolen Goods
- File a Mechanic’s Lien if You’re Still in Possession of the Vehicle
-
File a Business Insurance Claim
Can Tekmetric resolve a lost dispute for me with the customer's bank?
The customer's bank makes a single, final decision about whether the dispute is won or lost based on the evidence you give. Due to card brands' rules, Tekmetric is unable to change the issuer's decision concerning the dispute.
How do I View the Bank's Response?
To view or download the issuing bank’s detailed decision for a dispute in Tekmetric, follow these steps:
- Navigate to Payments → Disputes in Tekmetric.
- Select the specific dispute you want to review.
- Click on “View issuing bank response”. This will open or download a PDF containing the bank’s detailed decision. Additionally, you can contact the Payments team for guidance on handling disputes and preparing evidence. Ensure that any documentation prepared removes customer-specific details by using placeholders such as [CUSTOMER_NAME] or [INVOICE_NUMBER] to maintain privacy.
Why does this dispute not have a resolution yet?
There are a two main factors that impact the lifecycle of a dispute and it's resolution time: your initial response time to the dispute, and the issuers evaluation of challenged disputes.
Following the creation of the dispute, you have a limited amount of time, usually 7-21 days (depending on the card network), to respond to the issuer. The sooner you respond (ie. accept or challenge the dispute), the sooner the dispute will be resolved.
If you do challenge (ie. submit evidence), the issuer then has a limited amount of time to evaluate the evidence and decide the outcome, usually 60–75 days (depending on the card network). The decision is made by the issuer sometime during this period, and Stripe has no impact on their timeline for this review. Once Stripe receives the decision from the issuer, the dispute will be updated in your dashboard automatically to reflect the resolution.
Ultimately, the full lifecycle of a dispute, from initiation to the final decision from the issuer, can take as long as 2-3 months to complete. There are no actions you can take to reliably accelerate this timeline, other than by accepting the dispute in the Dashboard or API to resolve the dispute in the customer's favor.
When a customer disputes a payment, when will they receive the funds back?
In most cases, the cardholder receives the funds for a dispute as soon as they initiate it with their issuer, but it's hard to set reliable expectations around this.
When an issuer creates a chargeback on the card network, the network immediately pulls back the funds from Stripe and returns them to the issuer. The issuer may or may not credit the funds back to the cardholder at this time, while the dispute outcome is still pending. If the issuer decides the dispute in your favor, the network pulls the funds back from their cardholder and returns them to Stripe. If the issuer decides in their cardholder's favor, the issuer keeps the funds that were originally debited from Stripe, which either reimburses the issuer for the funds they already credited their cardholder, or goes to the cardholder at this point, if the issuer did not already credit them
What is an Inquiry Dispute?
You may receive an inquiry about a payment from a customer. An inquiry is a preliminary phase during which a card network gathers information before deciding to open a formal dispute.
Failing to respond to an inquiry can signal to the issuer your implicit acceptance of the claim, resulting in an escalation to a formal, and likely unwinnable, chargeback. Unless you intend to accept financial liability, always respond to inquiries immediately, making every effort to amicably resolve issues with your customer during this stage.
Stripe Resources