A dispute (also known as a chargeback) occurs when a cardholder/payer questions a payment on their credit card statement. The card issuer then creates a formal dispute, which immediately reverses the payment. Disputes are a feature of the Visa, MasterCard and American Express card networks intended to protect cardholders from fraudulent activity. As an organizer on Cheddar Up who receives payments, it's always possible that you could receive a dispute. This article discusses how to prevent disputes and what to expect if you experience one.
Our dispute process
The following provides highlights as to what you can expect if you receive a dispute:
- When a dispute is filed, Cheddar Up is notified and we, in turn, send emails to both the payer who filed the dispute and the organizer to whom they made payment.
- The payment amount, along with a separate $15 dispute fee, levied by the card network, will be deducted from the organizer's Cheddar Up account balance. If there are not enough funds in your Cheddar Up account to cover the dispute, Cheddar Up will debit your bank account to recover these funds.
- Cheddar Up will begin the process of responding to a dispute on your behalf. The dispute resolution process allows us to submit evidence that the payment was valid (see below for more details on how you can help with this).
- If the dispute is found in your favor, the disputed amount and the $15 fee is returned to your Cheddar Up account. If a dispute is upheld (found not in your favor), the cardholder’s payment remains refunded.
- The process of resolution typically takes 60-90 days.
The following steps are critical for an organizer to follow should they receive a dispute. The closer they can follow these steps, the more likely the dispute will be found in their favor.
- If you receive a disputed payment, reach out to the payer immediately to clarify what the payment was for, and confirm that it was indeed not fraudulent.
- Request that the payer withdraw the dispute with their card company immediately and send evidence that the card company has acknowledged their retraction. Submitting a photo or screenshot of that letter is acceptable.
- If the payer purchased a physical item, please send Cheddar Up Support proof of shipping or other evidence that the product or service was received by the payer for the payment in question.
- Provide Cheddar Up Support with evidence of a refund policy and how it was communicated to the payer.
Disputes are part of accepting credit card payments online and the best way to manage them is to prevent them from happening at all. An effective dispute prevention strategy uses a number of methods, including:
- Make sure that what will appear on payers' credit card statements is relevant. You can use our customization feature in Build > Settings to ensure the statement descriptor is recognizable.
- Make sure to communicate that "Cheddar Up" may also be seen on their statement as the descriptor for their payment.
- Clearly communicate any refund and/or cancellation policy with payers. This can be done in your collection description and/or with a custom receipt.
- When shipping physical goods to customers, use carriers and services that provide online tracking and delivery confirmation whenever possible. Provide this information to your customers as soon as it’s available.
Top things to know about disputes
- Most disputes occur as a result of payers not recognizing the credit card statement descriptor for a charge.
- The most effective way to win this type of dispute is to have the payer withdraw the dispute with their card company and submit written evidence (photo or screengrab) from their card company that the dispute has been withdrawn.