Key Takeaways
- Disputes and inquiries can lead to lost revenue if they’re ignored or mishandled.
- There are strict timeframes for responding to inquiries and disputes. If missed, merchants risk a chargeback.
- Proactive tools and clear policies can help merchants prevent disputes.
- Enabling dispute alerts can give merchants time to protect the sale.
If you’ve ever opened your inbox and seen a dispute notification, you’re familiar with the feeling of dread that comes with it. And if you haven’t yet experienced this, you probably will at some point.
A dispute can take your money, your product, and your time. Acting quickly is key, because the window to respond is short. If too many disputes stack up, you could be charged higher fees or lose the ability to process card payments. While disputes can have serious consequences, these situations may be prevented, or at least managed, with the right steps.
What are inquiries and disputes, and how do they happen?
An inquiry is the first signal that a customer or their bank has questions about a transaction. It’s not a formal dispute yet, and that’s the best time to resolve the situation. Inquiries give you a short window to clear up confusion, provide documentation, or offer a refund if it makes sense.
If the situation isn’t resolved quickly, the customer or their bank may file a dispute. At that point, their bank is asking for the money back, and it’s up to you to prove the sale was legitimate.
Some common reasons for disputes include:
- The customer doesn’t recognize or agree to the charge.
- The customer claims the product never arrived, the service wasn’t provided, or the product was damaged or didn’t match the description.
- A recurring payment wasn’t canceled on time.
- The charge went through twice.
What to do if you receive an inquiry or dispute
Start by reading the notification carefully. There will be a deadline and instructions on how to respond. The earlier you reply, the better your chances are of resolving it smoothly. If there’s still an inquiry and not yet a formal dispute, a thoughtful response could stop the issue before it escalates.
You’ll need to provide documentation to prove the transaction was valid. Depending on your business and the nature of the dispute, that might include:
- Receipts or invoices
- Delivery confirmations or tracking numbers
- Signed agreements or service logs
- Refund or cancellation policies (and proof they were provided to the customer)
- Screenshots or email correspondence
Timeframe to respond to a dispute
Below are approximate timelines for disputing inquiries, chargebacks, and exceptions. Actual timeframes are subject to change by the card brand or networks, so refer to the timeframes referenced in your inquiry or dispute notification.
Credit/Signature Debt
| Payment Network | Inquiries | Chargebacks | Exceptions |
|---|---|---|---|
| American Express | 12 Calendar Days | 14 Calendar Days | N/A |
| All Others | 20 Calendar Days | 15 Calendar Days | 14 Calendar Days |
PIN Debit
| Payment Network | Inquiries | Chargebacks | Exceptions |
|---|---|---|---|
| EBT | 6 Calendar Days | 6 Calendar Days | N/A |
| All Others | 10 Calendar Days | 10 Calendar Days | 10 Calendar Days |
| PayPal Debit Network | 15 Calendar Days | 5 Calendar Days | 5 Calendar Days (if appeal is applicable) |
Help prevent disputes before they happen
Disputes often come out of nowhere, but many of them can be prevented with a few steps built into your daily operations.
- Turn on alerts. Early notification gives you a real chance to fix the issue before it becomes a chargeback.
- Use fraud tools. Real-time fraud monitoring and internal review processes can help catch risky behavior before it becomes a problem.
- Process payments carefully. Use chip readers or magnetic swipes whenever possible and verify expiration dates before running a card.
- Don’t split transactions. If a card is declined, don’t try to break the charge into smaller amounts. That can create issues with the cardholder’s bank and make it more difficult to gather documentation if an inquiry occurs.
- Always get authorization. A valid approval from the customer’s card issuer is a basic but essential safeguard.
- Make policies visible and accessible. Share your refund, cancellation, and no-show policies at the time of sale. This can be on the receipt, online, or in writing.
- Document product and/or service deliveries. If you shipped an item or completed a service, save proof of what was provided and when.
Being proactive can make all the difference
While it might not be possible to eliminate disputes entirely, these practices can reduce the likelihood of one occurring and make it easier to respond when one does come in. For further guidance on managing and preventing merchant disputes, refer to Fiserv’s merchant user guide on dispute best practices.
If you’re not sure whether you’re set up to receive alerts or want to check your response procedures, contact Huntington Merchant Services to connect with us. A few minutes of planning today could save you a lot of time, money, and frustration in the future.
Huntington Merchant Services
24/7 Merchant Services support at 1-800-984-3383
MerchantSupport@huntington.com