A business will inevitably deal with a credit card dispute or two over the course of a year. Some businesses that handle a lot of volume deal with dozens or even hundreds of disputes, which can be a costly and time-consuming process. As each credit card issuer has a different process for handling disputes and deciding whether a charge back should be issued to a client, the process can be complex, but most credit card companies follow a similar basic procedure for handling disputes. Understanding this process is crucial when preparing for potential disputes and for minimizing losses.
Every credit card issuer will request documentation from the customer and the merchant before making a decision on a dispute. The procedure for submitting this documentation may vary, and different issuers might ask for different things. Most will require a statement from a representative of the business explaining why a chargeback should not be issued and any relevant documents such as receipts and invoices that back up the business’s claim. These might be requested at different times during the dispute, however. Credit card issuers may also take different amounts of time to render a decision on a dispute. However, most major credit card companies like VISA and MasterCard will make a decision within 30 days unless the charge is especially large or there are other complicating factors at play.
In some cases, a credit card issuer will launch a more detailed investigation that might take up to three months to complete. This is rare, as standard documentation is usually sufficient to prove to a card issuer whether or not a dispute is justified. Businesses should also note that some credit card companies tend to rule in favor of customers and place more of a burden on their merchants to prove that a charge was justified. From the issuer’s perspective, this makes sense, as it protects them from allegations of fraud. However, it can be frustrating for business owners. It’s important to keep documentation of every sale, which can be much easier with a good credit card terminal and POS software.
Businesses which handle a large number of credit card disputes may benefit from the services of an experienced credit card processing company. Processing companies can help to streamline the procedures for responding to a credit card dispute and can help to make the process more direct, even when disputes need to be submitted through different credit card issuers. In any case, learning about disputes and filing all relevant paperwork in a timely manner is important for building up a good profile and may help a business to win future disputes.