Handle Payment Disputes and Chargebacks

Documentation Index

Fetch the complete documentation index at: https://docs.arcuserp.com/llms.txt

Use this file to discover all available pages before exploring further.

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When to use this workflow

• A customer disputes a charge with their credit card issuer
• A payment was marked as fraudulent
• A customer claims they were double-charged
• You need to submit evidence (invoice, proof of shipment, communication) to dispute a chargeback

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What is a dispute?

A dispute occurs when a customer or their bank challenges a transaction. Common reasons include:

• Customer claims the order was unauthorized (fraud)
• Customer says they never received the item
• Customer claims the item arrived damaged or defective
• Amount discrepancy (charged different amount than agreed)
• Duplicate charge

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Responding to disputes in Arcus

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Step 1: Locate the disputed transaction

1. Open the customer account.
2. Click the Payments tab.
3. Look for transactions marked as Disputed or Chargeback (typically highlighted in red).
4. Click the disputed transaction to open details.

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Step 2: Review the dispute reason

In the dispute details, you’ll see:

• Dispute reason code (from the customer’s bank)
• Dispute amount
• Timeline (when the dispute was filed)
• Deadline to respond (typically 7-14 days)
• Customer’s claim statement (what the customer told their bank)

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Step 3: Gather evidence

Collect documentation to prove the transaction was legitimate:

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Step 4: Submit response in Arcus

1. In the dispute details, click Submit Response or Contest Dispute.
2. Upload or paste your evidence:
   • Invoice and order details
   • Tracking information and delivery confirmation
   • Communication with customer (emails, chat logs)
3. Add a brief explanation:
   • “Order was delivered to the address on file on [date] per [carrier] tracking [number].”
   • Or: “Customer requested a refund, which we processed on [date]. No chargeback should be necessary.”
4. Click Submit.

Expected result: Your evidence is sent to the payment processor (Stripe, etc.) and the bank reviews it. You’ll be notified of the outcome within 5-10 business days.

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Common dispute scenarios

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Scenario 1: Fraud claim (unauthorized transaction)

Customer claim: “I didn’t authorize this charge.” Your response:

• Submit the order with proof that it was placed from the customer’s IP and email.
• Include the invoice showing delivery to their address.
• Provide tracking confirmation.
• If payment was made by card, note that address verification (AVS) and CVV matched.

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Scenario 2: Item not received

Customer claim: “I never received the order.” Your response:

• Submit the tracking number and delivery confirmation from the carrier.
• Screenshot of the carrier’s tracking page showing delivery date, time, and location.
• Show that the customer signed for the package (if applicable).

Note: If the item was truly lost in transit, you may need to issue a refund or reship the item.

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Scenario 3: Item not as described

Customer claim: “The item arrived damaged / is not what I ordered.” Your response:

• Submit the original order and invoice showing the exact item and description.
• Include communication with the customer (if any) acknowledging their concern.
• Show that a return or replacement was offered.

Note: A damage claim may be covered by your shipping carrier’s insurance (Shippo, etc.). File a claim separately if applicable.

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Scenario 4: Duplicate charge

Customer claim: “I was charged twice.” Your response:

• Show that only one invoice was issued.
• Explain if there were multiple attempts (e.g., first payment failed, second succeeded).
• If truly a duplicate, issue a refund and explain it to the customer.

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GL impact

When a dispute is filed:

• No GL entry until the dispute is resolved.
• If dispute is won (you retain the payment): No change to GL.
• If dispute is lost (payment is reversed): A reversal GL entry is created (debit to Dispute Loss Expense, credit to Cash).

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Timeline and deadlines

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Tips for winning disputes

1. Act fast: Don’t wait until the last day to submit evidence.
2. Be concise: One clear, well-organized response is better than multiple rambling ones.
3. Track everything: Keep screenshots of tracking, delivery confirmations, and customer communication.
4. Address verification: Use AVS (Address Verification System) and CVV matching to reduce fraud disputes.
5. Clear shipping terms: Make sure order confirmations clearly state shipping and delivery expectations.
6. Communication: Keep copies of all communication with the customer (emails, chat logs, notes).

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Preventing disputes

1. Clear order confirmations: Make sure customers understand what they ordered and the total amount.
2. Tracking updates: Send shipment notifications with tracking numbers.
3. Delivery confirmation: Request signature confirmation for high-value orders.
4. Responsive customer service: Address concerns quickly (damaged items, missing items) before they escalate to disputes.
5. Return policy: Have a clear, easy return process so customers use it instead of disputing.

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