Responding to Disputes

A dispute occurs when a customer challenges a completed transaction with their bank, card issuer, or payment provider.

Disputes usually happen when a customer:

• Doesn't recognize a charge
• Claims non-delivery of goods or services
• Requests a refund but doesn't receive it
• Suspects unauthorized use

Properly responding to disputes is critical to:

• Protect your revenue
• Maintain a healthy risk profile
• Avoid account restrictions

Dispute Lifecycle (High Level)

1. Payment completed
2. Customer files dispute
3. Dispute is opened
4. Merchant is notified
5. Evidence is requested
6. Dispute is resolved (won or lost)

Disputes are time-sensitive. Missing response deadlines almost always results in losing the dispute.

How You're Notified

Disputes are communicated through:

• Merchant dashboard notifications
• Email alerts
• Internal support channels
• (Where applicable) webhook events

Always monitor these channels closely.

Common Dispute Reasons

What Evidence Is Usually Required

When responding to a dispute, you may need to provide:

Transaction Proof

• Chapa reference
• Merchant reference
• Payment verification response

Customer Proof

• Customer email and phone number
• Proof of identity (if applicable)

Delivery or Service Proof

• Order confirmation
• Delivery confirmation
• Access logs (for digital services)
• Screenshots or invoices

Communication Records

• Emails or messages with the customer
• Refund or cancellation policy acknowledgements

How to Respond Effectively

1. Act Quickly

• Submit evidence before the deadline
• Late responses are automatically lost

2. Be Clear and Organized

• Match evidence directly to the dispute reason
• Label files and explanations clearly

3. Be Honest and Accurate

• Never submit false or misleading information
• Inconsistent data hurts credibility

When You Should Accept a Dispute

Sometimes it's better to accept the dispute when:

• You made an error
• The customer is clearly right
• You lack strong evidence
• The transaction amount is small

Accepting early can:

• Reduce processing fees
• Improve customer trust
• Lower dispute escalation risk

Preventing Future Disputes

Dispute prevention is just as important as response.

Best Practices

• Clear product descriptions
• Transparent pricing
• Visible refund policies
• Prompt customer support
• Use webhooks to detect failed or incomplete payments
• Refund proactively when appropriate

Relationship with Refunds

• A refund before a dispute is filed usually prevents disputes
• A refund after a dispute does not always stop the process
• Excessive disputes may still impact your risk profile

Risk & Consequences

High dispute rates can result in:

• Increased monitoring
• Higher fees
• Payment method restrictions
• Account suspension (in extreme cases)

Key Takeaways

Next Steps

• Security Guide - Core security practices
• High Risk Business - Understanding risk classifications
• Webhooks - Handle webhook events