A dispute is a contested credit card charge. When a cardholder believes a charge on their account is incorrect or fraudulent, they request that their card company or issuing bank rescind the charge. The card company or issuing bank then initiates a chargeback against the merchant until the dispute is resolved.
Please be aware that all disputes incur a $15 service fee, regardless of the outcome.
A chargeback is the reversal of a credit card charge. Upon request by the cardholder, the card company or cardholder’s issuing bank takes back the money that had previously flowed from cardholder to merchant. The money is temporarily transferred from out of the merchant’s acquiring bank account and returned to the cardholder’s issuing bank account, until the dispute is resolved.
If you’ve received a dispute, please visit this section of our Dispute Center for detailed guidance.
Cardholders can initiate disputes for a variety of reasons, but the most common is that the cardholder does not recognize a charge on their account and suspects fraud. Other reasons, like duplicate charges being processed, or the cardholder claiming that goods/services were not provided, are less common, but do happen. A dispute can also be initiated when the cardholder requests a refund from the merchant, but their request is not fulfilled in a timely manner.
When a dispute is initiated by a cardholder and their bank, the funds in question are temporarily removed from the merchant’s account and transferred back to the cardholder’s account. At this point, the merchant can choose to fight the dispute to win back the funds, or accept it and let the cardholder keep them. The merchant lets their payment processor know what they’d like to do, and the payment processor passes the merchant’s response to the cardholder’s bank.
As a merchant fighting a dispute, you will only be dealing with Neon Pay’s Dispute portal and the cardholder directly, should you choose to contact them.
More detailed information can be found in our Dispute Processes resource.
If you’ve received a dispute, please visit What to do if you've received a dispute.
If you believe the charge is valid, you will need to submit evidence and/or an explanation to contest the dispute. You may choose to write a message explaining the situation and why you believe the charge is valid, upload evidence to the dispute portal, or both. 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.
When compiling evidence to prove the charge is valid, it’s important to note the reason the cardholder initiated the dispute. Oftentimes a cardholder will see a suspicious transaction on their statement and report it to their card company. If the card company initiates a fraud investigation, transactions that occurred within a few days of the suspicious one will also be subject to investigation, which can lead to disputed charges that were not actually fraudulent. When the reason for the dispute is fraud, it is important to include any available evidence that proves the transaction was not fraudulent, such as receipts, emails, and order records or history connected to the cardholder in question.
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. If you suspect that the disputed charge was fraudulent, you may accept the dispute, or upload any evidence at your disposal to aid in the investigation. Supplying the transaction information will either help prove the transaction was not fraudulent, or if a true case of fraud, will help the card company or issuing bank’s investigation, so it is usually a good idea to upload evidence.
Generally, when a dispute is initiated, the card company or issuing bank removes the funds in question from the merchant and transfers them back to the cardholder. If you would like to refund the cardholder and not fight the case, you can accept the dispute. The cardholder will keep the amount in question, and ensure that you don’t return any more funds than necessary.
The dispute process can take up to 90 days to fully resolve, but in some cases may take even longer. It varies greatly from case to case and depends upon each stakeholder and financial institution involved.
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.
An accurate statement descriptor is vital to preventing disputes. If a cardholder recognizes the charge on their statement, they are much less likely to initiate a dispute. To make sure your statement descriptor is accurate to your organization, navigate to the Merchant Accounts section of Neon Pay, then select the Merchant Account you’d like to edit. In Account Details, edit Statement Descriptor.
Note: Neon Pay sends the specified Statement Descriptor to the cardholder’s card network or issuing bank, but ultimately, these institutions control what appears on a cardholder’s statement.
Additionally, cardholders are less likely to dispute a charge if they can resolve their concerns directly with the merchant in a timely manner. Make sure there is a clear means of communication between the cardholder and your organization, and always address a cardholder’s purchase or refund concerns quickly and effectively.