How Long Do Merchants Have to Respond to a Dispute?
Navigate the timeline for merchant responses to payment disputes. Gain insight into the process and what follows their action or inaction.
When a consumer initiates a payment dispute, understanding the merchant’s response timeline helps clarify expectations. This timeline is important for how quickly a resolution is reached. Knowing these timeframes provides a clearer picture of the steps to resolve a disputed transaction.
The Dispute Process Overview
Once a consumer notifies their issuing bank about a disputed transaction, the bank reviews the claim. If the claim appears valid, the issuing bank provides a provisional credit to the consumer’s account. The issuing bank then forwards the dispute through the card network to the merchant’s acquiring bank. This communication officially notifies the merchant of the chargeback.
The acquiring bank informs the merchant about the disputed charge. The merchant is given a specific period to review the dispute and decide how to proceed. They can accept the chargeback, which means agreeing with the consumer’s claim, or contest it by providing evidence to support the original transaction. The merchant’s response, or lack thereof, influences the next steps in the dispute resolution process.
Typical Merchant Response Periods
The time a merchant has to respond to a payment dispute varies based on the card network. Each network establishes its own rules and deadlines for chargebacks, which merchants must adhere to. These timeframes ensure disputes are resolved efficiently while allowing merchants time to gather necessary documentation.
For disputes involving Visa cards, merchants typically have 20 calendar days to submit their response after receiving the chargeback notification. While 20 days is common, some scenarios might allow for 30 days. If the dispute progresses to subsequent stages like pre-arbitration or arbitration, deadlines for submitting further information can be shorter, sometimes as brief as 10 days.
Merchants dealing with Mastercard disputes have 45 days to contest a chargeback. Mastercard may issue a request for additional information before a full chargeback, in which case merchants have a shorter window, often 18 days, to supply details.
When a dispute involves American Express (Amex), merchants have 20 days to respond to an inquiry or a direct chargeback notice. This 20-day response period is the primary window for merchants to present their case.
For Discover card disputes, merchants have 30 days to contest a chargeback. Discover may issue requests for information that require a quicker response, sometimes within 20 days. These varying timeframes underscore the importance for merchants to identify the card network and the specific stage of the dispute.
Elements Affecting Response Duration
Several factors can influence how quickly a merchant responds to a dispute. The nature of the transaction itself plays a role; a complex transaction involving multiple services or an extended delivery timeline might require more time for the merchant to compile evidence. Similarly, a clear and straightforward dispute reason may allow for a quicker resolution.
A merchant’s internal operational procedures impact their response speed. Businesses with established dispute management teams and automated systems respond more efficiently. Conversely, smaller businesses or those with less formalized processes might take longer to prepare documentation. The volume of disputes a merchant handles also affects their response time. A surge in chargebacks might strain resources, leading to a longer preparation period.
Outcomes Following Merchant Action
Once the merchant’s response period concludes, the dispute moves into its next phase. If the merchant responds and provides evidence, the issuing bank reviews this documentation. The bank assesses the evidence against the consumer’s claim and the network’s rules. Following this review, the issuing bank makes a final decision, which may result in the provisional credit becoming permanent or the original charge being reinstated.
Should the merchant fail to respond within the designated timeframe, this inaction results in the dispute being resolved in the consumer’s favor. The temporary credit previously applied to the consumer’s account becomes permanent. This outcome occurs because the merchant did not provide evidence to challenge the consumer’s claim. The resolution of the dispute, whether through merchant action or inaction, brings the process to a conclusion.