It may seem unheard-of for a nonprofit organization to receive a dispute, but it does happen and it’s important that you respond appropriately. Follow these important steps to understand the reason for the dispute, gather important and relevant information related to the charge and the dispute reason, and respond to the dispute.
1. Understand why the cardholder filed a dispute.
There are many reasons why a dispute occurs, including at times an honest mistake on the part of the cardholder. In the Disputes section of Neon Pay, click on the amount of a listed dispute to view the Dispute Details page. Note the Amount and Reason. The reason will tell you more about why the cardholder is disputing the charge and will help guide your decision to either accept or contest the dispute.
- Fraud - the cardholder claims their payment information was fraudulently used by another individual. While actual fraud does occur, on occasion a dispute may be filed in error by a spouse or family member who did not recognize the charge.
- Customer complaint - complaints by the cardholder include goods/services not received, the merchandise was defective or not as described, refund not processed, etc. These types of disputes most often occur for nonprofits when the donation is tied to a purchase of some sort.
- Authorization - occurs when a payment is submitted with an invalid or expired authorization code. For example, a donor's card is authorized without fully completing the transaction. The payment is then later captured with a now-expired authorization code. This may result in an authorization dispute.
- Processing errors - processing errors generally indicate a payment submission error resulting in the cardholder initiating a dispute. Duplicate charges are common processing errors.
2. Contact the cardholder.
Contacting the cardholder is usually a good idea, to gain clarity on the reason for their dispute. Often, the dispute can be resolved through thoughtful communication and remedy with the cardholder directly. In many dispute cases, the cardholder simply forgot they made the purchase or did not recognize the merchant descriptor that appeared on their statement.
Be sure to document all communication and resolutions in order to provide them to the issuing bank.
What if the cardholder does not recall making the dispute?
In some cases, a cardholder may say they did not dispute the charge in question. The reasons for this typically fall into one of the following categories:
- The cardholder forgot that they disputed the charge.
- The cardholder disputed a different charge on their statement that occurred around the same time, and the issuing bank initiated chargebacks on all surrounding transactions as a fraud prevention measure.
- The cardholder did not dispute the charge but another member of their household did.
Usually, the cardholder will state they did not mean to dispute the charge, and would like the merchant to keep the funds. Make sure to get this communication in writing and submit it as evidence, proving that the cardholder did not mean to dispute the transaction. However, even this evidence does not guarantee that the merchant will win the dispute.
The best way to win this type of dispute is to request that the cardholder contact their bank and ask for a reversal. This is a formal request from the cardholder to their issuing bank to reverse the dispute.
In very rare circumstances, an issuing bank can initiate a dispute on a charge without the cardholder requesting it. This can occur if the card brand, e.g. Visa, determined the transaction to be fraudulent and initiated a dispute directly with the card-issuing bank. While this is a possibility, it’s important to note that this is a rare occurrence. The vast majority of disputes are initiated by the cardholder in one way or another.
3. Respond to the dispute.
Regardless of how your communications with the cardholder resulted, you must respond to the dispute. You may choose to either contest the dispute or accept the dispute.
Accepting the Dispute
If you believe the dispute is valid, you can choose to accept it. Select Accept Dispute in your Neon Pay dispute details to concede and accept the dispute. The cardholder will keep the money and the case will be considered resolved. This is usually a good idea in duplicate processing cases where the cardholder was mistakenly charged twice for a single transaction.
IMPORTANT - Do not submit evidence if you are accepting the dispute. Evidence is strictly for contesting the case and could confuse the process if you've chosen to accept the dispute.
It is important to accept and resolve the case rather than ignore it, even if you believe the dispute is valid and the cardholder should receive the funds back. This not only cleans up your dispute queue but also shows the card company and issuing bank that you’re actively monitoring disputes and will contest if needed.
Contesting the Dispute
Should you choose to respond and fight the case, use the dispute reason to help you collect compelling evidence to prove the charge was valid. Compelling evidence typically includes a copy of the receipt of purchase, order confirmation with cardholder’s name and billing address, and any other relevant transaction documents. The goal of uploading evidence to the dispute portal is to prove that the transaction was initiated and authorized by the cardholder. While actual fraud is rare in the nonprofit space, it does happen.
Add & Submit Compelling Evidence to contest the dispute.
- Add Evidence - Add all your evidence first. You can enter multiple pieces of evidence before submitting it.
- Submit Evidence - Once you've added all your evidence you can submit it. You can only submit once, so make sure all your evidence is entered as any further attempts to submit will fail.
4. Await a decision.
If you’ve chosen to dispute the charge, you’ll now wait for a decision. Your disputes and their statuses are shown on your Neon Pay Dashboard and update in real-time. When a dispute is updated in Neon Pay, all Administrator-level users associated with the Neon Pay merchant account receive an email notification.
Please review the dispute process flows to understand what happens next.