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Credit card processing: Steps to take when a client disputes a charge

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. Below you can learn steps to take to prevent disputed charges:

When a client disputes a charge, the client's bank creates a formal dispute. We'll reach out to you via email letting you know that action is required from you to complete the dispute resolution process. 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. Learn about the next steps based on the options below:


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 chargeback means that you are essentially agreeing that the dispute was valid and that the cardholder should have their funds returned. It is not an admission of fault, and in fact, it is the best option if you do not intent to submit evidence.

To accept a dispute, follow these steps:

  • Go to your Card Transactions report and locate the disputed charge
  • Click View Details
  • Click Accept Dispute

Accepting a dispute in SimplePractice

Once you accept the chargeback, the amount stated will be deducted from your account along with a $15 dispute fee. This is a standard practice and every payment processor charges a fee to cover the administrative costs of processing a chargeback.


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. The client can do this by contacting their bank and requesting the dispute be withdrawn. Even if your customer 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 customers might not be able to withdraw the dispute, or they might simply forget to do so.

You should follow these steps to submit your challenge along with the required evidence:

  • Go to your Card Transactions report and locate the disputed charge
  • Click Details
  • Click Submit Evidence and fill in all of the required information
    Submitting evidence in SimplePractice
  • Upload the evidence for the dispute in the Upload evidence field 

Important: Banks only allow for dispute evidence to be submitted once. Make sure to provide all relevant information, and that you include all of your 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.

  • Click Submit
    Entering in your evidence and submitting it

Important: If you don’t reply to the notification email by the deadline shared by the bank included in the email, we won’t be able to help you challenge the chargeback and the amount stated will be withdrawn from your account along with the $15 dispute fee. 

Note: Once you have submitted a response, it generally takes the card issuer 60–75 days to reach a final decision.


Inquiries or retrievals

Sometimes a card issuer will start investigating a charge before turning it into a full-fledged 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 without incurring a $15 dispute fee.

It is 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. At this point, 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, though 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.


Evidence required for challenging 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 we receive the relevant evidence from you, we will electronically submit this information to your cardholder’s issuer and we'll 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. These can help ensure 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: Jenny Rosen 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, but 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
    • 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:
      • AVS (Address Verification System) matches
      • CVC (Card Verification Code) confirmations
      • Signed receipts or contracts
      • IP address that matches the cardholder's verified billing address
    • 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.
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