In response to the elevated disputes faced by many merchants in the travel and entertainment industries due to COVID-19, Visa and Mastercard have issued guidelines for resolving them. These guidlines relate specifically to goods and services canceled directly due to a government order or prohibition. If your business is receiving disputes that fall into this category and you need to submit dispute evidence before the submission date, please proceed to this guide.
For all industries, the best actions you can take are to proactively communicate with your customers and issue refunds where appropriate, especially when requested.
Some customers may dispute a payment in error, not realizing it was legitimate. They can contact their card issuer and request the dispute be withdrawn. Even if your customer does this, the process involves a rigid series of formal communications between banking entities that still results in a lengthy resolution time.
Providing suitable evidence for the dispute reason code is always the best way to ensure that the dispute is reviewed appropriately during the active chargeback process. This way, if your customer cannot withdraw the dispute, you have submitted evidence suitable for the dispute reason. This might be sufficient to overturn the chargeback even if the cardholder does not withdraw.
Always provide evidence for every dispute you hope to have resolved in your favor, even if your customer has told you they are withdrawing the dispute. Card brands require that sellers respond to all disputes with evidence appropriate for the reason code.
If you do not provide evidence addressing the dispute reason code, you might lose the case even if your customer has been rebilled for the transaction. Simply stating that your customer is withdrawing, without also providing evidence specific to the dispute reason, is not considered a valid dispute response.
It may be more efficient—and provide a better customer experience—–to accept certain disputes and charge the customer again, if appropriate. Even when a dispute is withdrawn, it usually takes approximately 75 days to be finalized. Remember, it doesn’t matter to the card networks whether you win or lose a dispute; what matters is how many disputes a business receives, regardless of how many disputes they win.
Due to the strictly defined chargeback process, it’s common for a case to remain under review even when your customer tells you they’ve withdrawn the dispute and have already been rebilled by their card issuer.
Refunding a withdrawn dispute
If your customer is willing to withdraw a dispute so that you can issue a refund, it can still take 60–75 days for the dispute to be closed and the funds returned. Only when this happens can a refund be made. Since the dispute itself has already refunded the customer, accepting such disputes provides a better customer experience than trying to go through the lengthy process of withdrawal and dispute finalization.
In rare circumstances, Stripe can return the disputed amount before the dispute case is closed. When a dispute is withdrawn, the issuer rebills your customer and provides them with written confirmation (e.g., letter or email) stating that the dispute has been closed. If you can obtain a copy of either the written confirmation or clear evidence of rebilling, let us know and we may be able to close the dispute sooner. Even if your customer withdraws the dispute, you must still submit evidence refuting the reason for it.