Credit card companies may favor the cardholder in a dispute, even when presented with strong evidence by the seller. To prevent disputes, it's helpful to follow best practices.
Covered in This Article:
- What is a Disputed Transaction?
- Best Practices to Avoid Disputes
- What to do After a Payment Has Been Disputed
What is a Disputed Transaction?
A dispute occurs when a cardholder questions the payment made with their card issuer. Cardholders may dispute the transaction for a variety of reasons.
Often, the cardholder may not recognize the transaction because their bank applies a “Friendly Name” description to the transaction that is different from the description provided by SwimTopia.
Best Practices to Avoid Disputes
➧ Issue refunds promptly.
Not issuing a refund promptly is the biggest reason disputes occur. See ➞ Stripe Refunds for details.
➧ Issue refunds for rejected registrations.
Rejecting a registration form does not automatically issue a refund. Team administrators need to issue a refund separately from the payment details page. See ➞ Stripe Refunds for details.
➧ Provide advance notice before capturing a conditional fee.
It is possible to provide a message when capturing the conditional fee, but it is best practice to give advance notice to the member detailing the amount to be captured, the date on which the fee will be captured, and a reminder about why it is being charged.
Don’t delay capturing conditional payments to lessen confusion leading to disputes. Many teams use this feature to manage volunteer commitments, so capturing these "fines" usually happens after the season is over. Members have likely forgotten they provided this "pre-approval" to capture these fees, so communicating with them in advance can help eliminate this issue.
See ➞ Conditional Fees - Pre-Approve, Capture & Release for details on this feature.
» Note: Manually releasing pre-authorized fees is optional, as all conditional fees automatically expire 8 months from the date they are authorized.
➧ Create a reasonable refund policy.
Dispute reviewers are not obligated to take your policy into consideration, but they are more likely to do so if it is a reasonable policy. Add your refund policy to the acknowledgment section of your registration form and check the box to require a signature. See ➞ Registration Form - Main Section.
➧ Keep billing contact information up to date.
Make sure your billing contact is kept up to date under Manage Team > Settings and the Reply-To email on any registration forms is accurate and up-to-date.
We will reach out to the cardholder and to the billing contact requesting further information about the disputed transaction via email. If these email addresses are not monitored, you may miss our messages.
Settings - Billing Contact:
Registration - Reply-To Email:
What to do After a Payment Has Been Disputed
Cardholders are returned the disputed amount to their account, pending a review by their bank. During this time, if the cardholder does not rescind the dispute, SwimTopia can challenge the dispute on your behalf. If you challenge the dispute, we will help you gather the recommended evidence to be submitted. Evidence needs to be submitted promptly, usually within 15 days of the dispute.
» Tip: It is good practice to get the card holders’ response in email so that it can be documented and SwimTopia can submit the response to the bank as evidence.
➧ Who decides to uphold or rescind a disputed transaction?
The card issuer will review the details of the dispute. You can submit evidence as to why the dispute should be upheld. It is important to be clear and concise in your explanation. Provide clear documentation of communication between you and the cardholder
➧ What happens if a dispute is rescinded or resolved in your favor?
No further action is necessary. No funds were withdrawn or added to the team's Stripe account.
➧ What happens if a dispute is lost?
The amount of the dispute will be withdrawn from the team's Stripe account. This will show as a system-generated refund on the payment details page for this transaction. If this withdrawal causes the team's Stripe account to become negative, Stripe will withdraw the necessary amount from the connected bank account in approximately 1-3 business days.
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