A dispute happens when a cardholder contacts their bank to question a transaction. Common reasons for a dispute include:

• The cardholder didn't recognize the transaction.
• The cardholder didn't receive the goods or services.
• The goods or services didn't match the description.

To resolve the dispute, you need to provide evidence that the transaction is genuine. If you don't respond to a dispute, it can escalate to a chargeback, and the cardholder keeps the money from the transaction. If you receive an excessive number of chargebacks, we might add additional fees or terminate your account.

To learn how to reduce the risk of chargebacks, go to Avoid chargebacks.

A dispute moves through the following stages:

Stage 1: Retrieval request

You receive a retrieval request when the cardholder's bank requests more information about a transaction. To respond to a retrieval request, you can submit evidence about the transaction or notify us if you’ve already issued a refund. If the cardholder’s bank or card brand doesn’t support retrieval requests, they can skip this stage and issue a chargeback.

Stage 2: Chargeback

You receive a chargeback if the cardholder’s bank doesn’t receive a response to the retrieval request, or if the bank disputes a transaction directly. We automatically deduct the transaction amount from your account to credit the cardholder. To respond to a chargeback, you can accept the chargeback, defend the chargeback, or notify us if you’ve already issued a refund.

Stage 3: Pre-arbitration

If the cardholder’s bank rejects your evidence, they can escalate the dispute to pre-arbitration. During pre-arbitration, our Risk Team reviews the dispute case. If they determine that the case has sufficient supporting evidence, they can escalate the case to arbitration with the card brand.

Stage 4: Arbitration

During arbitration, the card brand reviews all evidence and makes one of the following decisions: 

• If the card brand accepts your evidence, the cardholder’s bank returns the transaction amount to your account, and you can view the returned amount in Payroc Insights. 
• If the card brand rejects your evidence, the cardholder keeps the transaction amount, and you are responsible for arbitration fees.