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The Chargeback process - how to handle disputes

Kay Endörfer
  • Updated

Overview

 

Note:
You can learn more about how disputes work in Stripe docs on Disputes and Fraud.
 
With any purchases you have, there can also be payment disputes. All transactions have the risk to be disputed for multiple reasons. When a client disputes a payment and also contacts their bank asking for a refund, we call it a chargeback. When this happens, the disputed funds are withdrawn from your account until the dispute gets cleared.
 
Important
Regiondo does not decide who wins or loses a dispute - that’s up to the bank that issued your guest's credit card. 

If you choose to dispute a chargeback, our team will ensure that all the necessary documents are attached and that the information is presented clearly.

 
Attention!
All dispute results are final and they cannot be appealed!
 

1. The Dispute process

Here are some stages when a dispute is created:
 
  • The customer’s bank notifies Stripe of the dispute. Regiondo is notified afterwards by Stripe
  • The bank automatically deducts the disputed amount and a dispute processing fee from Stripe.
  • Stripe removes the funds from our Regiondo balance to cover the dispute deduction.
  • Regiondo Support gets in contact with you to compile evidence and submit it on your behalf.
  • Stripe receives the evidence submitted by Support and sends it to the cardholder’s bank for investigation
  • The submitted evidence is reviewed by the cardholder's bank and then informs Stripe of the decision
  • Stripe informs Regiondo and afterwards we inform you of the outcome of the dispute
 
Note:
If it is not appropriate to accept the dispute or work with your end-customer to withdraw the dispute, the Support team will contact you in order to compile the evidence and respond to the dispute.
 

1.1 Disputing a chargeback

 

We suggest getting in touch with your guest and discussing the chargeback before you respond. You can also accept the dispute or work with your end-customer to withdraw the dispute.
Either way you can clarify their issue and possibly resolve the problem directly. If you did have conversations with your client before the dispute, we can also use them as evidence.

If a customer disputed a payment in error, not realizing it was legitimate, please ask your customer to contact their card issuer and request the dispute be withdrawn following this guide: https://support.stripe.com/questions/customer-withdrawal-of-a-dispute.
 

1.2 Requirements for submitting the evidence

 

The requirements for defending against disputes vary depending on the reason for the dispute. For all types of disputes, a comprehensive evidence can significantly strengthen your case when disputing the chargeback. 

The support team will gather the evidence related to the Booking and excerpts from your legal terms and conditions, specifically related to the cancellation policy. Some common examples include:
 
  • Transaction details, usually found in the booking details view
  • Any messages between you and the buyer
  • Confirmation emails sent to the buyer
  • Information about the tickets sent to the buyer
  • Payment Amount
  • Specific Time and date of the Booking
  • Evidence that the guest received the service at the agreed date and time
  • Proof that the transaction in dispute has already been refunded
  • Proof that your policies and terms and conditions were presented to the guest (in the ticket or in your website)
 
Important
If you do not answer to our inquiry email by a given deadline, we will submit the evidence on your behalf with all the Booking information from your account and keep you informed of the outcome by email.
 

1.3 What happens after the bank receives the evidence file

Banks only review evidence once, so evidence can only be submitted once.
  • We will tailor your evidence submission to the type of dispute it is. 
  • The bank will make a decision somewhere between 60-75 days after the evidence due date. The decision is the bank’s alone, and the outcome is final.

 

1.4 Dispute conclusion:

 

Although Stripe transmits the evidence we provide on your behalf, the dispute process, including the outcome, is managed entirely by the bank. The bank’s decision is final and cannot be appealed or challenged.
If the chargeback is successful, the funds under dispute will return to you. If the chargeback is not decided in your favor, you will be debited for the chargeback amount on your next payout.

 

2. Accepting a chargeback

You can Accept the dispute to avoid a lengthy dispute process. You may want to accept the dispute if:
  • Your supporting documents do not satisfy the defence document requirements.
  • The transaction amount is not high enough to spend resources on compelling evidence.
  • The transaction amount does not outweigh the risk of losing the chargeback fee for the second booked chargeback.
  • The transaction is known to be fraudulent.
  • You agreed with the client, and he is entitled to keep the money
  • Accepting a dispute is not considered an admission of wrongdoing and is sometimes the most appropriate response.
 
Important
Do not refund the guest's credit card. The bank has already withdrawn funds from your account until the dispute is cleared. Instead, please respond to the email sent by our Support team and we will communicate your decision to the relevant parties.
 
Attention!
You can no longer accept a dispute once our Support Team submitted the evidence.
 

3. Work with the customer to withdraw dispute

 

In some cases it may be beneficial to reach out to your customer directly to ensure the dispute was not submitted in error (e.g. if they disputed a payment in error, not realizing it was legitimate). The customer can then contact their bank and request the dispute be withdrawn. It’s important to note though that even if the customer has stated they’re withdrawing the dispute with their bank, it is still crucial to upload evidence appropriate for the dispute reason in Stripe.
 

4. Chargeback types depending on the payment method:

4.1. Bank transfer chargebacks (SOFORT)

For chargebacks received from bank transfer payment methods such as Sofort there is no dispute management. There is no automated way to defend and reverse these chargebacks, that facilitates this process. Funds will return to the account holder by default.
It is recommended you follow up with your guest to collect payment for Sofort chargebacks and/or cancel any bookings associated with the chargeback, if necessary. 
 
 

4.2. Direct Debit/Lastschrift

You can find more information about SEPA DD disputes here:

https://support.stripe.com/questions/sepa-direct-debit-payment-disputes
Payment by "direct debit" is a very popular and convenient payment method for customers from Europe. For you as a provider, however, in addition to the positive aspects, there are also a few other points to consider when you offer this payment method for your store.
 
  • Direct debit authorizations issued can be revoked by the customer up to the day before the debit is made
  • Amounts already debited can be easily revoked by the customer at his bank up to 8 weeks after the account has been debited.
  • If the customer's account is not covered or the bank details are incorrect, a return debit note is automatically issued.
  • Regiondo has no influence on returned direct debits and cannot prevent them. If the payment of a booking, for which you have already received a payout from us, is reclaimed by the customer, the payout will be reversed by us. You must then claim the outstanding amount from the customer yourself, as we have no way of collecting the amount from the customer again.

 

4.3. Other payment methods / conflicts

The orders paid via CB (Carte Bancaire) are automatically lost within a few seconds after being disputed.
As this is the policy of the payment method provider, we are not allowed to submit evidence on your behalf.
Your client was automatically reimbursed by the payment provider, therefore if you think there has been a mistake, please contact him directly to recover your money.

If you activated payment with invoice, cash payment or your own PayPal account, you must recover the money yourself from your customer.
 
Regarding other payment methods (e.g. GiroPay, WeChat) there have not been any conflicts so far, like for the payment methods above.
Most of these payment methods are processed via Stripe therefore these will appear as Credit Card issues in Stripe.
 
The other payment methods do not issue any disputes. (As an example, you can take a look at https://stripe.com/docs/payments/ideal#disputed-payments)
 

4.4 Klarna Disputes

Klarna disputes are handled by Klarna directly. If you should receive a Klarna dispute, they will email you directly and will give you the possibility to defend it with their dispute resolution team.
Dispute emails from Klarna should always include the following information:
 
  • The Stripe payment reference (py_xxx)
  • The amount of the total payment
  • The date when the transaction took place
  • The customer’s email address
 
Important
Our Support team follows the recommendations when responding to disputes and providing evidence. 
The recommendations depend on the dispute reason and what was purchased (digital product or service).
They should include general evidence and as much relevant information as possible to increase the likelihood that the dispute is found in your favor.
We can guarantee that we always do our best in defending and winning the dispute, even if there are other parties that have the final decision.

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