When you are using Shelterpay powered by Stax, there may be times when a cardholder disputes a transaction they made with your organization. This is also known as a chargeback. Chargebacks are a preventable but not completely avoidable part of accepting cards. Fortunately, Stax makes handling these directly within your Stax Dashboard easy.
The Dispute Process
After a cardholder completes a transaction at your organization, they generally have 120 days to file a dispute with their bank if they believe they are owed a credit back. Disputes can be filed for many reasons, such as suspected fraud, duplicate charges, services not as described, etc.
When the cardholder files the dispute with their bank, their bank sends the dispute information to Stax, along with a request for the funds from the transaction. Stax must send the cardholder's bank the funds and must also debit you for the funds immediately.
Along with the debit for the disputed charge, you are also debited a $25 chargeback fee which covers the cost of processing the chargeback. Debits related to disputes do not currently appear in Shelterluv. Because of this, if a deposit in your bank account does not match up with your Shelterluv accounting reports, it may be because you received a dispute.
You will receive an email notification to your Stax account administrator's email address notifying you of the dispute as soon as it is reported to Stax.
Your Stax account administrator can add additional email addresses to receive those notifications by navigating to Settings > Notification Settings within the Stax dashboard.
Click the grey See Details button to navigate to the dispute in your Stax Dashboard and upload your response to the dispute if you would like to refute it. Note that you have limited time to upload your response after the dispute was first reported. The time to refute a dispute can be anywhere from 7 days to a month, depending on the card brand.
After you upload a response, you typically receive a provisional credit back for the dispute within 2-3 business days. Your response is reviewed by the card brand (i.e., Visa, Mastercard, etc.) and the cardholder's bank, which can take up to 45 days.
If the dispute is ruled in your favor, you will keep the credit that was issued to you, and the dispute's status will be updated to Won. If the dispute is ruled in the cardholder's favor, the disputed amount will be debited from your account again, and the dispute's status will be updated to Lost. Note that neither Stax nor Shelterluv has any say over the ruling of a dispute; the decision is made entirely by the card brand.
With some disputes, you may be required to respond with additional documentation after the card brand reviews your initial response. This is called "pre-arbitration". If this occurs, you will receive an email notification with the subject line Update on Disputed Payment. The email will look like this:
If you receive an email like this, and the dispute status in your Stax dashboard says "Pending", you should upload new documentation and a written explanation confirming why the cardholder is not owed the refund.
You will automatically lose the dispute if you do not upload any additional documentation.
Dispute Prevention and Responses
Here are some best practices to help prevent cardholder disputes:
- Ensure that you present a contract during every transaction and that your contract explains your refund policy in detail.
- Reconcile your bank account with your Shelterluv accounting reports frequently to identify incorrect transactions.
- List your organization's phone number on your website so that a customer can easily contact you if they have a question about a transaction.
When responding to a dispute, here are some helpful documents to include in your response:
- A copy of the signed receipt
- A copy of the signed contract with your refund/return policy highlighted
- A brief description of the transaction and interaction with the customer
As always, feel free to contact us anytime for assistance at help@shelterluv.com. We are happy to help!