Disputed charges or chargebacks are forced transaction reversals that are initiated by the cardholder’s bank. They are meant to serve as a consumer protection mechanism.
When a client disputes a charge, the client's bank creates a formal dispute with our processor. When this happens, we'll reach out to you via email to let you know what actions are required from you to complete the dispute resolution process.
If a formal dispute is created, the original transaction amount along with a $15 dispute processing fee charged by the cardholder's bank will be withheld from your Online Payments account balance. In the event that your Online Payments balance doesn’t have sufficient funds to cover the disputed amount and fee, the difference will be withdrawn from your connected bank account immediately.
Note: AutoPay will automatically be disabled for a client who has a dispute. This is so that you can have the time you need to respond to the dispute and so that you can have the most control over managing their billing. Once a resolution has been reached on the dispute, you can choose to re-enable AutoPay for the client. Learn how in this guide: Getting Started with AutoPay.
The dispute resolution process requires that you either accept or challenge the claim. To challenge a dispute case, you'll need to respond and submit evidence to make your case that the payment was valid.
In this guide, we’ll cover:
- Preventing disputed charges
- Accepting a disputed charge
- Preparing evidence to challenge a disputed charge
- Challenging a disputed charge
- Inquiries or retrievals
- Disputes on partially refunded payments
Preventing disputed charges
While disputes are an unfortunate part of accepting online payments, the best way to manage them is to prevent them from happening. Here are some important steps to take to prevent disputes:
- Maintaining clear and frequent contact with your clients can help prevent many of the reasons for disputes. By responding to issues and processing refunds or replacement orders quickly, your clients are much less likely to take the time to dispute a payment. By making your contact information prominent and keeping clients updated throughout their payment process, you can actively work to prevent disputes from happening.
- Including a clear description of your refund and cancellation policies in your intake and practice documents.
- Using a recognizable name for your Statement Descriptor. This can be set or updated by going to My Account > Settings > Billing and Service > Online Payments and we recommend using your business name. This helps avoid customer confusion when they look at their bank statements.
Accepting a disputed charge
Accepting a dispute means that you are essentially agreeing that the dispute was valid and that the cardholder should have their funds returned. It’s not an admission of fault, and accepting it is the best option if you don’t intend to submit evidence.
To accept a dispute, follow these steps:
- Navigate to Billing > Card Transactions and locate the disputed charge
- Click View Details
- Click Accept Dispute
Once you accept the dispute, the dispute will be closed with the client’s bank. At this time, the disputed funds will be returned to the client’s bank account and the disputing bank will retain the $15 dispute fee. This is a standard practice, and every payment processor charges a fee to cover the administrative costs of processing a dispute.
Note: You can consider writing off an accepted dispute. You can learn more about this here: Change the fee for individual appointments.
Preparing evidence to challenge a disputed charge
The evidence you submit to challenge a disputed charge should be appropriate to the reason for the dispute. Web logs, email communications, proof of prior refunds, etc., can all be helpful. Once you submit your evidence to challenge the dispute, we’ll electronically submit this information to your client’s card issuer and will notify you of any updates to the dispute.
You can prepare a suitable response that has the most relevant evidence using the following best practices. Following these practices helps you have the greatest possible chance of a dispute being found in your favor and your funds returned:
- Keep your evidence relevant and to the point
- Card issuers review thousands of dispute responses each day. A long introduction about your product or company, complaint about the customer, or the unfairness of the dispute isn’t going to make your responses more compelling. Instead, provide only the facts surrounding the original purchase, using a neutral and professional tone. For example: Client attended a X session at [place of business] on [date] using their [Visa/Mastercard/etc.] credit card. The client agreed to our practice policies and authorized this transaction.
- Many merchants also include email correspondence or texts with the customer; however, it’s important to be aware that these exchanges do not verify identity. If you’re going to include them, make sure only the relevant information is included (e.g., if you’re going to include a long email thread, redact any text that is only quoting previous emails).
- Your evidence should be factual, professional, and concise. While providing little evidence is a problem, overwhelming the card issuer with unnecessary information can have the same effect.
- Provide clear and accurate evidence
- The bank professionals handling the review of your response are going to decide fairly quickly whether or not the evidence is sufficient to refute the cardholder’s claims. You can make it easier for important information to be noticed by circling or calling out important points, keeping things brief wherever possible. For responses with multiple pieces of evidence, you can also include a table of contents and give each uploaded image/PDF an attachment number or letter. A lengthy practice policies document or refund policy that has the relevant information highlighted can make your case much clearer.
- Card issuers do not follow any links provided in a response. Instead, you must include a clear screenshot of your terms or policies as they appear to your clients if they are an important part of your defense (e.g., a customer disputed a late cancellation fee, but your policies clearly outline that there is a cancellation window that must be adhered to).
- Include proof of customer authorization
- AVS (Address Verification System) matches
- CVC (Card Verification Code) confirmations
- Signed receipts or contracts
- IP address that matches the cardholder's verified billing address
- Fraudulent disputes account for over half of all disputes. Proving the legitimate cardholder was aware of and authorized the transaction being disputed is vitally important in such cases. Any data that shows proof of this is a standard part of a compelling response, such as:
- SimplePractice always includes any AVS/CVC results as well as the purchase IP (if available), but if you have any other evidence of authorization be sure to include it.
- Include proof of service
- In addition to fraudulent disputes, claims from cardholders that appointments never happened, were unsatisfactory, or not as described are also potential dispute reasons. Assuming that all is well on your side (the services happened, were satisfactory, and were as described) then you’ll want to provide proof of the appointment.
- Include a copy of your practice policies and refund policy
- When it comes to disputes, fine print matters. Providing proof that your customer agreed to and understood your policies, or did not follow your policies when it comes to refunds is critical. A clean screenshot of how your policies are presented during intake is an important addition to your evidence—it's not enough to simply include a text copy of these.
Challenging a disputed charge
If you receive notification that a client has disputed a charge, it's important to note that some clients may dispute a payment in error, not realizing the charge was legitimate. We recommend first reaching out directly to the client and asking that they contact their bank to withdraw the dispute. Even if your client does this, the process involves a rigid series of formal communications between banking entities that still results in a long process.
Regardless of your client's willingness to withdraw the dispute, we highly recommend submitting a formal challenge, as some clients might not be able to withdraw the dispute or may simply forget to do so.
Important: Evidence to challenge a dispute must be submitted by 11:59 PM UTC at the latest on the designated due date.
To challenge a dispute, follow these steps:
- Go to your Card Transactions report and locate the disputed charge
- Click Details
- Click Submit Evidence and fill in all of the required information
- Upload the evidence for the dispute in the Upload evidence field
Important: Banks only allow for dispute evidence to be submitted one time. Make sure to provide all relevant evidence in a single PDF document under 8MB in size and 50 pages or less in length. On average, evidence submitted is 1-5 pages in length.
Note: Once you’ve submitted a response, it generally takes the card issuer 60–75 days to reach a final decision.
- Click Submit
Important: If you don’t challenge the dispute by the deadline shared by the bank included in the email, we won’t be able to help you challenge the dispute. Additionally, the disputed funds will be returned to the client’s bank account, and the disputing bank will retain the $15 dispute fee.
Note: You can consider writing off a lost dispute. Learn more here: Change the fee for individual appointments.
Inquiries or retrievals
Sometimes a card issuer will start investigating a charge before turning it into a formal dispute. These are known as inquiries or retrievals, depending on which card network initiated the investigation. These will appear on your Card Transactions report as a disputed charge, but unlike other disputed charges, these can be refunded by clicking Refund Charge. You won’t incur a $15 dispute fee for refunding a dispute inquiry or retrieval.
It’s important to submit evidence to prevent the inquiry from escalating into a formal dispute. However, if the evidence is found insufficient or the client refutes your evidence, the case could become a formal dispute. If this occurs, the charge cannot be refunded and you will have to update your response and submit additional evidence.
Disputes on partially refunded payments
While uncommon, a payment can be disputed for the full amount, even if a partial refund has already been made (e.g., a refund of a smaller amount that has been agreed upon). We understand this can be frustrating as it leaves you responsible for the partial refund you’ve already processed and the full amount disputed. However, card issuers are very willing to rectify this situation.
Even if you plan to accept the unrefunded portion of the dispute, it’s important for you to provide evidence of the partial refund in your response. This should include the amount and date of the refund, and even a screenshot of the refund information from your account.
In most cases, the card issuer cancels the original dispute and then creates a separate one for the corrected amount. If the dispute is fully resolved in your favor, the entire amount is returned to you. If it’s not, only the partially refunded amount is returned.