Handling Disputes In InkSoft Payments

The dispute process includes several phases. Here is a breakdown of terms and tips for responding to disputes.

Key Terms:

Cardholder: The customer disputing the transaction
Merchant: Provided the goods and services being disputed
Issuing Bank: The Customer's bank 

The Dispute Cycle

• Retrieval
  
• First Chargeback and Re-Presentment
• Pre-Arbitration Chargeback (Second Chargeback)
  
• Arbitration Chargeback

Retrieval

A Retrieval Request is a process where a Cardholder or Issuing Bank requests additional information on a charge they do not recognize. This is usually a precursor to an actual Chargeback and is a documentation request from the Issuer, however not all chargebacks start with a retrieval. Additional information is documentation such as receipts, terms, and services or proof of purchase. 

A Retrieval Request does not reverse the transaction itself; it is a precursor to a Chargeback which does reverse the transaction. The Chargeback cycle of Retrieval will not change, and there is no financial impact on the Merchant. You can skip this step and go directly to First Chargeback.

Important: It is essential to provide a timely response to a Retrieval Request. If it is ignored, it will often become a Chargeback, and because the merchant ignored the request, the merchant gives up their right to fight the Chargeback.

First Chargeback and Re-Presentment

A First Chargeback usually indicates an incoming Chargeback that has not been addressed or has been pre-determined as Won or Lost. Once responded to, a First Chargeback becomes a Re-Presentment. In most cases, a First Chargeback will trigger a debit to the Merchant, and a Re-Presentment will trigger a credit to the Merchant.

Find out more about how to prevent chargebacks here. 

Pre-Arbitration Chargeback (Second Chargeback)

The Pre-Arbitration Chargeback is also referred to as the Second Chargeback. This is where the Issuer rejects the Re-Presentment and decides to pursue the Chargeback further. This typically results in a debit to the Merchant, the same as First Chargeback. When a Pre-Arbitration Chargeback is responded to by the merchant, it usually results in a credit to the Merchant, the same as Re-Presentment.

Arbitration Chargeback

If a Merchant responds to a Pre-Arbitration and the Issuer does not accept the response, the case becomes an Arbitration Chargeback. The Merchant can either accept liability or ask the network to make a final decision at a cost.

Responses to Retrievals, First and Second Chargebacks

How should I respond to a Retrieval Request?

Unlike a Chargeback, a Retrieval Request does not require much supporting evidence and is not won or lost. Either the information provided satisfies the inquiry or moves to the next phase of the dispute process, a Chargeback. If Retrieval Requests are overlooked or ignored, they can and will lead to Chargebacks, resulting in a loss of revenue. Below is a list of the information to provide when responding to a Retrieval Request: 

1. A legible receipt or invoice
2. The company and product information
3. Delivery details
4. Transaction information such as the date of the transaction, the amount, and supporting transaction details
5. Authentication of the transaction, such as an email, phone call, or signature
6. Refund information (if applicable), such as the corresponding refund date or the date the refund will be issued if requested.

When reviewing the request and/or contacting the customer, we recommend understanding their needs and, if applicable, proactively issuing the refund to help prevent a Chargeback.

If a customer initiates a dispute/first chargeback:

If a customer initiates a dispute, you'll receive an email notifying you of the situation. The email will go to the email address associated with the first Payment Portal user created at time of signup. You will have also had to have verified your email to get those notifications.

To find your Disputes dashboard, where you can manage and respond to individual disputes:

1. Click the "Payments" menu on the left side of your InkSoft app (under the "Financials" header), and then click "Manage Disputes" at the top of the new screen.
2. If you are not already signed in to your payment portal, you will be prompted for your payment portal's login credentials (which are separate from your InkSoft.com login credentials).
3. Click "Disputes" on the left-side menu.
4. On the Disputes page, click on the dispute you want to respond to. Only disputes that have the Open status can still be responded to.

Options To Respond:

Option 1: Accept Liability

You may choose to voluntarily concede to a dispute by accepting liability. When you click the Accept Liability button, you will be prompted to enter the dollar amount you concede to the cardholder. By default, the full disputed amount will be populated, but you may also concede a partial amount and submit a representment for the remaining disputed funds.

Option 2: Representment (Respond with Compelling Evidence)

If you choose to challenge a dispute, you can respond with a representment and upload compelling evidence in your defense.

To submit a representment:

1. On the dispute, click "Respond."
2. Enter your email address in the "Contact" field.
3. Add any additional notes to the issuing bank in the "Note" field.
4. Click "+ Attach Document" to upload your supporting evidence.
5. Review that you have supplied everything you would like to provide to the cardholder's issuing bank. Note: Once you submit your response, you cannot modify or add to it in any way.
6. If you need more time to review, click "Save for Later." 

When you're confident you're ready to send your information to the issuing bank, click "Submit Response."

The replied-to dispute will remain on your Disputes management page. No matter the outcome, you will be informed of the dispute's resolution via email.

1. Gather your Supporting Dispute documentation. This can be the same material provided for the First Chargeback as well as any additional documentation collected after the First Response.
2. Login to your Payments Portal to upload the supporting documentation.
3. Once Accepted, the Dispute will be in a ‘Closed’ status pending the final decision by the Card Brand.