Overview of Chargebacks & Disputes
Chargebacks exist to help cardholders in the following ways:
- Keep consumers financially secure
- Stop criminal fraud
- Encourage transparent business practices and excellent customer service
Chargeback: A cardholder-forced reversal of a transaction, usually due to claims of fraud or complaints about the order or merchant.
While many chargebacks are initiated for valid reasons, cardholders sometimes dispute legitimate purchases for invalid reasons including buyer’s remorse, friendly fraud, avoiding return fees, or attempting to receive an item for free.
No matter the reason, we’ll help you understand how to proceed.
|Retrieval request||Sometimes the first step of a chargeback. This is a request from the issuing bank for more information about the transaction. This is your opportunity to collaborate with the issuing bank and, possibly, avoid the dispute process altogether. You’ll need to respond in a timely fashion and provide documentation.|
|First chargeback||Notification from the issuing bank on behalf of the cardholder, who intends to recover funds. The contested funds are debited from your account upon notification. You can accept the chargeback to assume liability, or if you disagree with the chargeback reason, you can enter into a dispute with the cardholder.|
|Dispute outcome||The issuing bank reviews your evidence and renders a decision. If you win, the funds are credited back to your account.|
|Pre-arbitration or Arbitration||Any involved party can re-open a chargeback if they disagree with the initial decision. During arbitration the bank involves a neutral party to decide the case, which is often the card network. The reason code might change, and you may need to submit additional evidence. Each card network has their own rules for how arbitration cycles work.|
|Cardholder||The shopper who made the purchase.|
|Issuing bank||The bank that houses the account funding this purchase. Generally sides with the cardholder.|
|Card network||The network that the shopper’s card belongs to. Generally a neutral party who does not stand to benefit from either resolution.|
|Payment processor||The service responsible for processing the payment and transferring funds. This may alternatively be a payment gateway, a payment facilitator, or Bolt Payments. Generally sides with the merchant.|
|Merchant||You’ll decide how to respond to a chargeback and provide documentation if you want to dispute it.|
|Bolt’s chargebacks team||A team of highly skilled risk and fraud analysts who are ready to help you represent transactions and win disputes.|
|Fraudulent chargeback||A chargeback where the cardholder claims fraudulent or unauthorized use of their card.|
|Dispute||You’ll provide the appropriate evidence to refute the cardholder’s claims. If you win, you’ll retain the funds. Disputes are communicated using a combination of dispute codes and dispute statuses to track why a dispute occurred and whether a dispute has been won or lost.|
|Indemnification||For users of Fraud Protection, Bolt’s guarantee that if a transaction we approve results in a fraudulent chargeback, we will bear the cost and responsibility of disputing and/or refunding the customer.|
What to Expect
How to handle chargebacks depends which payment processing model you use and whether you have Bolt’s Fraud Protection.
For users of Fraud Protection, fraudulent chargebacks that meet certain criteria are indemnified by Bolt, meaning we’ll reimburse you for the disputed funds. Learn more at Determining Liability
Bolt’s chargebacks team can help qualifying merchants win disputes. You’ll submit evidence via email, and we’ll represent your case.
Bolt’s dispute representment is available to the following users:
|Payment processing model||With Fraud Protection||Not protected|
|Bolt Payments||Qualifies for Bolt’s Dispute Representment||Qualifies for Bolt’s Dispute Representment|
|Gateway processing||Qualifies for Bolt’s Dispute Representment||Go to your payment processor dashboard and follow their dispute representment process.|
Learn how to manage chargebacks and disputes with the articles in this section.