What Happens If a Merchant Doesn’t Respond to a Dispute?

When a consumer discovers an unfamiliar or incorrect charge on their account, initiating a transaction dispute with their bank or credit card issuer is a common protection mechanism. This process is designed to address issues with transactions and potentially recover funds. While the consumer initiates the dispute, the resolution often depends on the merchant’s engagement with the process.

The Merchant Response Period

Once a consumer files a dispute, their bank or card issuer communicates the chargeback to the merchant’s bank, known as the acquiring bank. This triggers a specific timeframe for the merchant to review and respond with supporting evidence. Major card networks like Visa, Mastercard, American Express, and Discover set these periods, which vary.

Merchants typically have 20 to 45 days to respond to a chargeback. For instance, Visa allows 30 days, Mastercard 45 days, American Express 20 days, and Discover 20 to 30 days. These deadlines ensure a structured process for dispute resolution.

Merchants respond by providing documentation to their bank, either refuting or accepting the chargeback. Evidence includes transaction details, proof of delivery, signed receipts, or a detailed explanation rebutting the claim. Failure to provide a timely or adequate response can have significant implications for the merchant and the dispute’s outcome.

The Default Outcome: Provisional Credit Becomes Permanent

If a merchant fails to respond to a chargeback within the established timeframe, the provisional credit granted to the consumer becomes permanent. It is a temporary credit applied to the consumer’s account by their bank while the dispute is under investigation. This ensures the cardholder has access to funds during the dispute resolution period.

Without a merchant’s timely contest or evidence, their bank provides no rebuttal. Card network rules dictate the chargeback stands in the cardholder’s favor. The provisional credit is then finalized into a permanent credit on the consumer’s account.

This outcome closes the dispute, resulting in the consumer retaining the funds. It is an embedded feature within card network rules, designed to protect consumers and streamline the dispute resolution process. The provisional credit serves as a safeguard, preventing consumers from being without funds during investigation. While consumers can spend this provisional credit, it can be reversed if the merchant successfully disputes the chargeback with compelling evidence. However, with merchant non-response, the risk of reversal diminishes.

Consumer Steps After Non-Response

After the merchant response period, consumers should confirm the dispute’s resolution. Regularly check bank or credit card statements to verify the provisional credit has transitioned into a permanent credit. This confirmation ensures the funds are definitively returned to the account.

Maintain thorough records of the dispute process. This includes copies of communications with the bank or card issuer and any assigned dispute reference numbers. Such documentation can be valuable if any questions arise later regarding the resolution.

If the provisional credit has not become permanent after the expected merchant response period, contact your bank or card issuer. Inquire about the dispute’s status and confirm its final outcome to resolve any lingering issues. This ensures the complete resolution of the transaction dispute.

Finality of the Dispute Resolution

If a merchant fails to respond to a chargeback, the dispute is considered closed and final once the provisional credit becomes permanent. Card networks and issuing banks consider the matter resolved in the consumer’s favor. This provides a clear conclusion to the dispute process.

While rare, a merchant might attempt a “representment,” a second effort to dispute the chargeback. This occurs only if new, compelling evidence emerges after the initial non-response and the chargeback has been finalized. Such instances are subject to strict conditions and are uncommon. The general expectation is that if a merchant does not respond within the initial timeframe, they forfeit their opportunity to contest the charge.

The consumer’s responsibility in the dispute process generally concludes once the credit is permanently applied to their account. This finality provides assurance that the disputed funds are returned. The system provides recourse for consumers, and non-response from a merchant typically leads to a favorable outcome for the cardholder.