Understanding and Managing Payment Disputes on Floorzap Payments

Introduction: What is a Dispute (Chargeback)?

When a customer doesn't agree with a credit card charge, they can contact their bank (the card issuer) to dispute it. This process is called a chargeback. It's essentially a request to reverse the payment.

Common reasons for disputes include:

• Fraud: The cardholder claims they didn't authorize the transaction.
• Consumer Issues: Problems with the product/service (e.g., not received, defective, not as described).
• Processing Errors: Technical issues like duplicate charges.
• Authorization Problems: Issues with how the payment was approved.

Important Note: This process typically applies only to credit card payments. Bank transfers generally cannot be disputed this way. When a dispute occurs, you will receive an email notification starting the dispute cycle. You will be able to find the dispute in your merchant portal under Transactions -> Disputes.

Keeping an eye on these notifications and understanding the process is crucial for managing potential revenue loss.

Email example you will receive:

The Dispute Lifecycle: Key Events & Stages

Here's a simplified overview of how a dispute progresses:

1. (Optional) Notification of Fraud: You might get an early warning (Visa TC40/Mastercard SAFE) about potential fraud. This is informational, free, and lets you
   act before a formal chargeback (e.g., refund, block user). If for example, you were able
   to stop the shipment or not provide service for the fraudulent transaction and refund the transaction, you can avoid incurring the chargeback fee.
2. (Optional) Request for Information: The issuer might ask for more details about the transaction before deciding on a chargeback. You'll need to respond.
3. Chargeback: Payment processor informs you that a chargeback process has started for a specific payment. This is your cue to start preparing and submitting defense
   evidence documents via the merchant portal. In the merchant portal, you will see status and defendable will say yes
4. Information Supplied: Notification confirming you (or payment processor automatically) submitted defense documents.
5. Issuer Review: The cardholder's bank reviews the evidence you submitted.
6. Outcome: 
   1. Chargeback Reversed: Good news! Your defense was successful, and the 
      funds are returned. (Status: Initially Pending, then Won). Be aware: a Second
      Chargeback is still possible.
   2. Second Chargeback: The issuer disagrees with your defense evidence and upholds the chargeback again. (Status: Lost).
   3. If Applicable) Pre-arbitration: A process for specific dispute types (e.g., Visa
      allocation, UnionPay) if the initial decision is contested further. Can result in:
      1. Pre-arbitration Won or Pre-arbitration Lost.
7. Other Events: 

1. 1. Dispute Defense Period Ended: You missed the deadline to defend, or you explicitly accepted the chargeback. (Status: Undefended, Lost, or Accepted).
   2. Issuer Response Timeframe Expired: The issuer didn't respond to your defense in time, so you win by default. (Status: Won).
   3. Issuer Comments: Additional text details from the issuer about the dispute reason.

Best Practices: Managing Disputes Proactively

1. Watch for Notifications: Check your email and portal regularly so you don’t miss
   defense deadlines.
2. Gather Evidence Early: Keep transaction records, proof of delivery, and any
   communication with the buyer.
3. Respond Quickly & Thoroughly: Detailed but concise evidence packages often have
   better success.
4. Leverage Refunds Before Chargeback: If you sense a legitimate complaint, offer a
   refund to avoid fees.
5. Utilize Portal Tools: The merchant portal usually has dispute docs, status updates, and deadlines clearly listed.

How to Defend a Dispute in the Portal

1. Navigate to “Transactions → Disputes.”: Find the specific dispute.
2. Check Status & Deadline. Status will say “Defendable: Yes” if you can still submit
   evidence.
   
   
3. Compile Your Evidence. Proof of delivery, order confirmation, customer communication,
4. Click “Submit Defense” and Upload Docs. Follow the on-screen instructions.
5. Confirm Submission. The portal will show a confirmation message and the dispute
   status update.

Common Pitfalls

• Missing the Deadline Deadlines are strict. Once it passes, you can’t defend.
• Insufficient Evidence Vague or incomplete info = losing the dispute.
• Ignoring Early Warnings Visa TC40 or Mastercard SAFE alerts give you a chance to
  proactively prevent the fee.
• Overlooking Communication Sometimes, customer outreach can resolve issues
  before they escalate.

Conclusion

Staying on top of dispute notifications, promptly gathering evidence, and using the merchant

portal effectively are key to minimizing revenue losses. By proactively watching for fraud

warnings and responding quickly, you’ll be well-prepared to defend your business when

chargebacks occur.