What is a Dispute?

A Dispute refers to an available action a cardholder can take to argue against fraudulent charges, billing errors, or issues with the product or service provided not meeting expectations, for example.

Typically, the preliminary stage to a formal dispute is a cardholder complaint to the Merchant. The Merchant should first engage directly with the cardholder where possible to understand their concerns, address potential issues, and work with the customer to resolve any outstanding issues amicably.

Tip: Open communication between Merchants and customers is one of the best ways to avoid a formal dispute and chargeback.

A dispute is first initiated by the cardholder (customer of the product or service provided) through their Issuer (the card brand, such as Visa or MasterCard), and goes through a series of reviews, actions, and decisions to eventually rule in favor of the Merchant or Cardholder respectively.

Dispute Stages

Dispute Stages are the primary milestones that a Merchant can expect to see when handling disputes. These six stages

Stage	Description
Retrieval	The Issuer is looking for more information about the transaction.
First Chargeback	The cardholder is disputing the transaction payment.
Representment	Both the Merchant and Cardholder submit their first round of supporting evidence.
Pre-Arbitration	The Cardholder lost the first dispute and both parties will submit more evidence.
Arbitration	The Cardholder lost the second dispute and both parties will arbitrate further with the card brand.
Reversal	The Issuer has acknowledged that the transaction is valid and will return funds back to the Merchant.

Warning: Please note that the platform does not offer steps to handle disputes in the Arbitration stage and must be discussed directly with the Issuer’s Card Brand, such as Visa or MasterCard.

Dispute Statuses

To get started, you’ll want to get familiar with the 4 available Dispute Statuses you’ll frequently encounter:

Dispute Status	Description
Needs Response	The Issuer is awaiting the Merchant’s evidence, or to Accept Liability, for the dispute.
In Review	The Issuer is in the process of reviewing submitted evidence to reach a decision.
Won	The Issuer has reached a decision in favor of the Merchant.
Lost	The Issuer has reached a decision in favor of the Cardholder.

Click here to see a detailed list of all Dispute Stage and Status combinations and actions.

Stage	Status	More Information
Retrieval	Needs Response	The Issuer is requesting supporting documentation for the transaction in question, such as terms & services or proof of purchase. This is a precursor to an actual chargeback. The chargeback cycle of Retrieval will not change and there is no financial impact on the merchant. Upload Evidence: The Merchant should provide evidence by a pre-determined date given by the Issuer and shown in the Portal or applicable API response. Recommended supporting evidence includes, but is not limited to: Sales Receipts or Invoices Refund or Terms of Service policies, Cardholder Communications with the Merchant
First Chargeback	Needs Response	A first dispute payment chargeback has been opened and has not yet been responded to by the Merchant. The Merchant has two available options: Accept Liability: Voluntarily concede to the Dispute & debit the held funds from the Merchant to the cardholder. Representment: Proceed to the next cycle of the Dispute and send provide evidence to the Issuer to reinforce the validity of the transaction. Warning: If the Merchant does not respond by the provided due date to with one of the decisions above, the Issuer will automatically make a decision for either Won or Lost status for the Chargeback.
	Won	An incoming chargeback was pre-determined as “Won” in the Merchant’s favor. This decision is final. Result - An unsuccessful First Chargeback from the Issuer will trigger a credit to the merchant.
	Lost	An incoming chargeback was pre-determined as “Lost”, or against the Merchant. This decision is final. Result - A successful First Chargeback from the Issuer will trigger a debit from the Merchant back to the cardholder.
Representment	Needs Response	The Merchant has decided to support their transaction’s validity by providing evidence. Upload Evidence: The Merchant must provide evidence by a pre-determined date given by the Issuer and shown in the Portal or applicable API response. In addition to the documentation recommended for Retrieval, supporting evidence for Representment includes, but is not limited to: Cardholder-Signed Service Contracts, Product Photos or Service Descriptions Note: This evidence must be provided in either a document file extnesion PDF or DOC, or image file type PNG, JPG, or GIF. Tip: Make sure your uploaded evidence is legible.
	In Review	The evidence provided by the Merchant is currently being reviewed by the Issuer to reach a decision. Next Steps - Await an Issuer decision.
	Won	After the evidence was reviewed by the Issuer, the chargeback was pre-determined as “Won” in the Merchant’s favor. This decision is final. Result - An unsuccessful First Chargeback from the Issuer after Representment will trigger a credit to the merchant. Next Steps - The cardholder can choose to further pursue the dispute through Pre-Arbitration steps.
	Lost	After the evidence was reviewed by the Issuer, the chargeback was pre-determined as “Lost”, or against the Merchant. Final Result - A successful First Chargeback from the Issuer after Representment will trigger a debit from the Merchant back to the cardholder.
Pre-Arbitration (Second Chargeback)	Needs Response	The Issuer has rejected the evidence provided by the Merchant during Representment and will continue pursuing the chargeback. The Merchant has two available options: Accept Liability - Voluntarily concede to the Dispute & debit the held funds from the Merchant to the cardholder. Accept Arbitration - The Merchant accepts and will work directly with the relevant Card Brand to arbitrate and reach a resolution. Warning: Arbitration steps incur additional fees.
	In Review	The evidence provided by the Merchant is currently being reviewed by the Issuer to reach a decision. Next Steps - Await an Issuer decision.
	Won	After the evidence was reviewed by the Issuer, the chargeback was pre-determined as “Won” in the Merchant’s favor. This decision is final. Result - An unsuccessful Second Chargeback from the Issuer after Representment will trigger a credit to the Merchant. Next Steps - The cardholder can choose to further pursue the dispute through Arbitration steps.
	Lost	After the evidence was reviewed by the Issuer, the chargeback was pre-determined as “Lost”, or against the Merchant. Final Result - A successful Second Chargeback will trigger a debit from the Merchant back to the cardholder.
Arbitration	In Review	When the Merchant has chosen to Accept Arbitration (or ask the card network to make a final decision at a cost). Next Steps - Await an Issuer final decision.
	Won	After all evidence and arbitration has been completed by the Issuer, the chargeback has reached a final decision of “Won” in the Merchant’s favor. Final Result - An unsuccessful Second Chargeback from the Issuer after Representment will trigger a credit to the Merchant.
	Lost	After all evidence and arbitration has been completed by the Issuer, the chargeback has reached a final decision of “Lost”, or against the Merchant. Final Result - A successful Arbitration will trigger a debit from the Merchant back to the cardholder.
Reversal	Won	This decision is final.

Click here to see the financial impact of each Dispute Stage and Status to the Merchant.

Stage	Status	Financial Impact
Retrieval	Needs Response	No Impact.
First Chargeback	Needs Response	No Impact.
	Won	The Merchant receives a credit. (+)
	Lost	The Merchant is charged a debit. (-)
Representment	Needs Response	No Impact.
	In Review	No Impact.
	Won	The Merchant receives a credit. (+)
	Lost	The Merchant is charged a debit. (-)
Pre-Arbitration (Second Chargeback)	Needs Response	No Impact.
	In Review	No Impact.
	Won	The Merchant receives a credit. (+)
	Lost	The Merchant is charged a debit. (-)
Arbitration	In Review	The Merchant is assigned arbitration fees by a card brand.
	Won	The Merchant receives a credit. (+)
	Lost	The Merchant is charged a debit. (-)
Reversal	Won	The Merchant receives a credit. (+)

When you’re ready to respond to a Chargeback Cycle and/or Dispute Stage, visit the pages below:

Respond to a Chargeback Dispute using the Portal

Supporting Documentation / Evidence

When a Dispute is initiated, the Issuer may request a detailed explanation of the problem from the cardholder to determine whether a cause for a legitimate dispute exists.

Reasons for disputes—those reasons that may be of assistance in an investigation include the following:

The merchant failed to get authorization
The merchant failed to obtain card imprint (electronic or manual)
The merchant accepted an expired card

Supporting documentation or evidence is the primary way for an Issuer to see the validity of the transaction during review and reach a decision. It is critical for Merchants to submit this to have the best chance to win a Dispute.

Below are the different types of evidence a Merchant can provide to help support their claims:

Evidence Type

Description

Formal Evidence

This includes official documentation directly related to the transaction.

Formal evidence includes, but is not limited to:

Signed credit card receipt
Completed credit card authorization form
Corresponding Invoice with cardholder contact information
Signed proof of delivery or Satisfactory Services

Informal Evidence

Informal evidence is relevant documentation that is not directly related to the transaction.

Informal evidence includes, but is not limited to:

Logs of correspondence between the Merchant & cardholder
Screenshots of the Merchant’s website and/or published Terms of Service
Pictures of the merchandise
A summary of the incident written by the Merchant

Note: View the current limitations for response file uploads:

Maximum of 8 documents total
A single document can’t exceed 1 MB
The total of all files cannot exceed 8MB
File Format – Must be either TIFF/TIF or PDF
Must be submitted within the Payrix portal or a Jira ticket prior to 5 business days before the due date.

Warning: Any Supporting Documents submitted as evidence must include the Chargeback ID and/or Issuer Dispute Case Number for review.

The Chargeback ID can be found on the Dispute Details page or can be found by making a GET request to the /chargebacks endpoint to locate it.

Warning: If the Merchant doesn't submit a response, the chargeback is automatically ruled in the cardholder's favor.

See the content below for recommendations for supporting documentation or evidence submissions for Disputes:

Click here to see Dispute Supporting Documentation recommendations.

Card brand Suggested Receipt and/or Invoice Requirements:

Card Present: The following are the Visa requirements for all transaction receipts generated from electronic point-of-sale terminals (including cardholder-activated terminals). It is recommended that merchants provide itemized receipts when possible.

Card-not-Present Transaction Receipt Requirements: The following are the Visa requirements for all manually printed transaction receipts in the card-absent environment.

Type of Evidence

Description

Credit Card Authorization Documentation

Card brands also consider the following acceptable ways of documenting a cardholder's approval for a transaction:

For a Mail/Phone Order Transaction a signed order/authorization form.
Details and a copy of the ID presented by the Cardholder
Evidence of Transaction completion by a member of the Cardholder's household or family (if not by the cardholder).

Proof of Delivery or Satisfactory Services

Cardholder goods receipt or satisfactory service rendering confirmation is one of the best protections a merchant can have. Some of the best details are indicated below:

Photos, Screenshots, Emails, or Recorded Phone Calls proving that the Cardholder disputing the Transaction has, or is currently using the products or services.
Product or service pick-up form with the Cardholder’s signature.
Evidence of procut delivery date and time with the same physical address that returned an AVS match of Y or M. (Signature not required.)
A neutral third-party opinion to help corroborate your claim against the cardholder.

Dispute Stage Processing Flows

See the diagrams available below for a visual representation of each Dispute Stage flow:

Retrieval

First Chargeback

Pre-Arbitration

Note that Arbitration is not included here as it does not take place on this platform.

Dispute vs Chargeback

A Dispute and a Chargeback are two distinct processes related to payment disputes.

A Dispute occurs when a customer is questioning a transaction with their issuing bank or credit card company, typically due to concerns raised around unauthorized charges, billing errors, or overall dissatisfaction with a product or service. This can be a formal process initiated through their issuer or credit card company during the preliminary Chargeback proceeding or an informal process where concerns are raised by the cardholder directly and discussed with the Merchant to seek a resolution.
A Chargeback occurs when a cardholder bypasses the Merchant entirely to dispute the transaction with their issuer or credit card company to reverse a transaction. Chargebacks are typically more formal and can also incur additional fees from a Merchant perspective. Chargebacks are typically initiated due to claims of fraud, or failure to receive goods or services.

Both listed processes above require prompt response from the Merchant with compelling evidence provided to support their transaction’s validity.