Everything you need to know about handling disputes—and best practices for protecting your business.
If you’re accepting payments online, chances are that you’ve dealt with a dispute at some point. While they’re typically uncommon, there are a few proactive steps that you can take to protect your organization, as well as some best practices to keep in mind when they do inevitably occur.
What is a dispute?
A dispute (also known as a chargeback) occurs when a cardholder (your customer) challenges a payment with their card issuer. LeagueApps does not play a role in dispute claims or decisions—instead, your customers’ credit card company reviews each claim and makes the decision to either refund the purchase or uphold the transaction.
How can you protect yourself?
Visible payment policies won’t eliminate all disputes, but they can reduce the number that your company faces. Clearly communicate your payment and refund policies on your company’s website, during registration, and in payment confirmation communications.
In general, you should make your payment policies easy to find, and require your customers to agree to them before they can submit payment. When using LeagueApps for registration, include the full policy instead of linking out to another webpage or document. We see many LeagueApps partners add an additional waiver to their programs that solely requests consenting to their Refund Policy.
Another tip is to make sure your business and payment gateway accounts are named in a recognizable way. The account’s name is the “statement descriptor” on your customers’ credit/debit card statements, so it is important they recognize the charge to avoid unnecessary fraud claims.
Timely Communication & Payment Operations
Many disputes occur when a customer feels as if they have no other option but to go through their credit or debit card provider. It’s a last resort. This is why we highly encourage upfront, timely communication.
One tactic that can help your team combat disputes is to implement a Service-Level Agreement (SLA). A SLA defines the level of service that a customer can expect to receive, and lays out the metrics by which that service is measured. For example, a customer support team can have a SLA to respond to all customer payment or refund requests within a 24 (business) hour timeline. Communicating this SLA to your customers will make them aware of the response timeline they can expect, which can deter them from reaching out to their credit card company while they wait for an answer.
To implement an SLA:
1. Establish a timeframe that is reasonable from a customer’s perspective and achievable for your staff
2. Set up a payment email alias such as firstname.lastname@example.org to streamline payment communication into one inbox
3. Create an auto-response message for all messages to that payments inbox, so that someone receives a message stating that they’ll hear back within a certain time period. This helps set customer expectations.
Stripe, whose technology powers LeagueApps Gateway, drives home the importance of communication and timeliness. “Some of the quickest, easiest actions you can take are to proactively communicate with your customers and issue refunds where appropriate, especially when requested,” they write.
What should you do once a dispute has been filed?
Best practices for submitting evidence
Once a customer files a dispute, you have two options: accept the dispute which results in a refund to your customer and a $15 dispute charge, or challenge the dispute with evidence to combat the customer’s claim. A challenge can result in the dispute being won, which means your organization retains the transaction, or lost, which means the customer is refunded and your organization is charged a $15 dispute fee.
When you use LeagueApps Gateway, you’ll be kept up to date on the status of any disputes, and evidence will be transmitted to your customer’s credit card company.
Our best practices for evidence submission are:
1. Contact the customer immediately. Ask why a dispute was filed, and if they are open to cancelling the claim with their card company so you can settle it outside of the dispute process. This will save you the $15 dispute fee and is the best chance of retaining the transaction.
2. Make your evidence submission factual, neutral, professional, and concise. Remember, the credit card company is reviewing the dispute and they review hundreds per day. Make your case clear and to the point so it is easy for them to understand.
3. Use quality evidence such as customer communication screenshots with the relevant portion circled. Do not submit URLs or poor quality screenshots—the reviewer won’t be able to see them.
4. Prove that your customer authorized the charge and consented to your policies. It is important to show waivers that clearly state a refund policy, with the customer’s IP address signature and time/date stamp. We highly advise adding your company’s refund policy to your LeagueApps waiver or as an additional waiver, so that your customers read and acknowledge before submitting payment.
5. Explain the reason a refund is not warranted. Simply stating that you have a “No Refund Policy” does not guarantee you will win the dispute. Explaining why your company has a no refund policy will help the dispute reviewer understand why the transaction should not be refunded. For example, you might explain that you pre-pay for expenses such as your facility, coaching, or equipment fees.
We have robust guidelines for all types of disputes which include what is needed to overturn and win a dispute, and guidelines for how to respond to each type of dispute. Learn more here.