Dispute (payment card)
After a payment card settles a transaction process, a dispute is a formal demand from a payer's card issuer, usually at the cardholder's request, for the transaction's acquirer to partially or fully reimburse the transaction's debit amount. The obligation for the acquirer to comply, as well as the entitlement of an issuer to raise a dispute, is limited to circumstances stipulated by the card association which facilitated the transaction and/or financial law.[1][2][3]
Issuers may raise disputes for a variety of reasons, including unauthorized charges, excessive charges, failure by the merchant to deliver merchandise, defective merchandise, dissatisfaction with the product(s) or service(s) received, or billing errors.[4] The return of money to a payer of a transaction is called a chargeback.
Chargeback fraud, also known as friendly fraud, could occur when the cardholder identifies a purchase on their transaction statement as fraudulent and disputes it. A 2022 study by Ethoca and PYMNTS.com found that 71% of ecommerce transaction disputes were due to service errors.[5]
In the United States, in the event of fraud, the cardholder is liable for a maximum of $50 worth of fraudulent charges.[6] Many card issuers will waive this fee.[7]
References
- ↑ "Resolve payment disputes quickly". www.visa.com. Retrieved 2026-08-22.
- ↑ "What is the true cost of a chargeback for businesses?". Mastercard. Archived from the original on 2026-08-12. Retrieved 2026-08-22.
- ↑ "2026 Discover Chargeback Process: How Discover Disputes Work". Chargebacks911. 2026-03-27. Retrieved 2026-08-22.
- ↑ PayCEC. "What are Chargebacks? Chargeback types, examples, processes". PayCEC. Archived from the original on October 8, 2022. Retrieved 2024-08-22.
- ↑ "What is Friendly Fraud". Ethoca. December 15, 2020.
- ↑ 15 U.S.C. § 1643
- ↑ "Tips to help consumers with disputes on credit card charges - USATODAY.com". USA Today. Archived from the original on March 26, 2009.