If you use Airwallex Cards and have a transaction you wish to dispute, please see here: How do I dispute a transaction?
This article will explain how to handle disputes and chargebacks as a merchant, using our Online Payments platform.
- What is a Dispute?
- How can I manage disputes via the web application?
- How do I proceed with a dispute if my customer agreed to withdraw?
- What evidence do I need to submit for a dispute?
- How to effectively handle a dispute when a customer alleges non-delivery of physical goods despite evidence of delivery?
- How do I calculate my chargeback ratio?
- How can I reduce disputes/chargebacks?
- Are there fees associated with disputes?
What is a Dispute?
A dispute occurs when your customer contests the legitimacy of the payment.
Dispute events generally happen on transactions processed with card-based payment methods, including Apple Pay & Google Pay. The shopper will reach out to the bank that issued their card to contest the payment. The issuing bank will then initiate the dispute flow, which is governed by the card scheme. Disputes are also possible on payments with local payment methods, please refer to our documentation, which provides detailed information specific to each local payment method.
At Airwallex, we understand that disputes are a risk to your business and can be a time-consuming exercise to manage. To enable you to effectively manage disputes, we have implemented various features that have been detailed in our product documentation.
How can I manage disputes via the web application?
Airwallex will notify you of any new disputes / updates on existing disputes via email, you can access the dispute details via the “View dispute” button in the email or by directly accessing the “Disputes” menu on the web application.
Our product documentation provides comprehensive instructions on managing disputes.
How do I proceed with a dispute if my customer agreed to withdraw?
For card payments, even if your customer has agreed to withdraw the dispute, you must still challenge it. To successfully do so, you must receive withdrawal confirmation via email from the customer's email address. This response, along with evidence from customer communication, must be submitted before the dispute response deadline.
Please refer to our product documentation to understand the best practice to respond to a dispute in this case.
What evidence do I need to submit for a dispute?
It is highly recommended that you proceed to challenge only when you are convinced of strong evidence to back your defense. Otherwise, the issuer will decline your challenge response, which will lead to escalation of the dispute and higher dispute charges.
Our recommended evidence differs depending on the
- Dispute reason (why your customer has raised the dispute)
- Challenge Reason (why you would like to challenge the dispute)
- Type of goods (physical, digital, offline service, reservation / booking etc.,)
We have covered all the best practices to respond to a dispute based on various dispute reason codes in our product documentation.
How to effectively handle a dispute when a customer alleges non-delivery of physical goods despite evidence of delivery?
It is recommended that you get in touch with your customer to check if they would like to withdraw the dispute as they have received the goods. If they agree, then please follow the instructions from above. If they do not agree then you need to provide specific evidence which will prove that customer’s claim is invalid:
- You have delivered the goods before the completion of shipping duration mentioned as part of your terms & conditions. Ideally this shipping confirmation should include the details of the product, shipping address and delivery date.
- Customer signature agreeing to your terms & conditions
- Customer signature indicating that they have received the goods or service
Please refer to our product documentation for comprehensive details on the best practice to respond to a dispute in this case.
How do I calculate my chargeback ratio?
Please note that the dispute ratio is different from the chargeback ratio. The dispute ratio includes dispute events in all different stages (refer dispute flow) whereas the chargeback ratio is specific to disputes in the ‘Chargeback’ stage.
Chargeback ratio is defined as the number of disputes in the ‘Chargeback’ stage, divided by the number of successfully captured intents over a given time period. Please note that dispute events escalated beyond the chargeback stage (e.g. pre-arbitration) will also be considered in this calculation.
To calculate your chargeback ratio you will need to calculate:
- The number of successful payment intents for the specified period: you can calculate this by downloading your payment activity for your specified period and using the ‘payment status’ field
- The number of chargebacks: you can calculate this number by exporting your dispute activity under ‘Disputes’ menu into a report and filtering for disputes in the “Chargeback” or “Pre-arbitration” or “Arbitration” stage
How can I reduce disputes/chargebacks?
There are several ways to reduce the number of disputes on your account:
- Respond to all the disputes in the RFI stage on time as these may turn into chargebacks.
- Help customers recognise their transactions by using the descriptor field to remind them of the goods or services they have purchased.
- If you are refunding a transaction to prevent a potential dispute, we recommend you use Airwallex’s refund process which ensures that funds are refunded to the same card or payment method used for the original payment.
- Respond to all disputes before the due date. Proceed to challenge a dispute only when you are convinced of strong evidence to back your defense.
- Provide specific and relevant documents in the dispute response, so that the reviewer can easily understand your challenge response.
- Ensure that your customers are presented with a full copy of policies/terms and conditions prior to the payment.
- Use the Airwallex risk management configurations to minimize the fraudulent transactions.
Are there fees associated with disputes?
Yes, there are fees per dispute. See the relevant fee schedule for your region for full information on the pricing: