Authored By Ethan Chan, Risk Manager, Mobi
A ‘dispute” happens when the cardholder (customer) disagrees with the product offered or service provided by you (merchant). As the cardholder exercises their rights, they usually follow up by asking for a refund (chargeback). Once the cardholder files a dispute, based on the card network report (Visa, MasterCard, etc), Mobiversa will initiate an investigation.
A chargeback can be related to dissatisfaction of the purchase or poor delivery of customer experience. Also,It may be filed for suspect fraudulent transactions involving their card.
A cardholder has a time frame of 120 days to file a dispute or chargeback, which means the transaction could be reversible within the 120 days window. It is best to avoid all chargeback, as acquirers, banks, and card networks may label your business as a fraudulent or high-risk. If the number of chargebacks is excessive, acquirer or banks may withhold remittances of payment. Also, you may be charged a penalty or a fine for each chargeback received as part of the card network compliance.
A chargeback is a cost, which can be avoided or minimized.