What If a Merchant Does Not Respond to a Dispute?

When a consumer makes a purchase, issues can arise that necessitate disputing a charge. Disputing a transaction is a protective measure allowing consumers to challenge unauthorized, erroneous, or unsatisfactory charges. This provides recourse when direct resolution with a merchant fails, initiating a structured investigation by the financial institution.

Understanding the Dispute Timeline

Initiating a payment dispute involves a structured process with specific timelines that both consumers and financial institutions must follow. Once a consumer formally disputes a transaction with their bank or card issuer, the financial institution begins an investigation.

For credit card disputes, the Fair Credit Billing Act (FCBA) generally requires consumers to notify the card issuer of an error within 60 days of the statement date on which the error first appeared. The card issuer must then acknowledge the complaint in writing within 30 days and complete its investigation within two billing cycles, not exceeding 90 days.

Debit card disputes are governed by Regulation E of the Electronic Fund Transfer Act. After a consumer notifies their bank of an error, the bank typically has 10 business days to investigate. If the investigation cannot be completed within 10 business days, the bank may extend it up to 45 days, or 90 days for certain transactions (e.g., outside the U.S. or new accounts). During an extended investigation, a provisional credit is often issued within 10 business days, providing temporary access to disputed funds. This provisional credit ensures access to funds during investigation, though it can be reversed if the dispute is not found in their favor.

Outcomes When a Merchant Fails to Respond

A merchant’s failure to respond to a payment dispute within the allotted timeframe impacts the case’s resolution. When a dispute is initiated, the financial institution contacts the merchant’s acquiring bank to request evidence supporting the original transaction. Merchants typically have a specific window to provide this evidence (e.g., Visa 20-30 days, Mastercard 45 days, American Express 20 days). If the merchant does not submit a response or compelling evidence by this deadline, they generally forfeit their opportunity to contest the dispute.

In such instances, the dispute is typically resolved in the consumer’s favor by default. If a provisional credit was issued, it often becomes permanent. The financial institution determines the transaction was erroneous or unauthorized due to lack of merchant evidence. The merchant’s account is debited for the disputed amount, along with any associated chargeback fees, which can range from $20 to $100 per transaction. This outcome highlights the importance of a merchant’s timely engagement, as non-response can lead to financial losses and reputational damage.

Consumer Actions After Merchant Inaction

After a merchant fails to respond, resulting in a consumer-favorable resolution, confirm the outcome’s finality. Consumers should check statements to ensure provisional credit is permanent and the disputed charge no longer appears. Most financial institutions provide written notification (mail or electronic) detailing the dispute’s resolution, confirming the investigation is closed and funds returned.

If the outcome is unexpected or ambiguous, contact your financial institution for clarification. Review bank communications, including provisional credit notices or investigation conclusions, to identify discrepancies. If the issue remains unresolved, further recourse is available. Consumers can escalate concerns within their bank or file a complaint with consumer protection agencies like the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC).

Differences Across Payment Channels

Merchant non-response dispute processes and outcomes vary by payment channel. Credit card disputes are largely standardized by major networks (Visa, Mastercard, American Express) and governed by the Fair Credit Billing Act. Networks establish 20-45 day timeframes for merchant responses to chargeback requests. Failure to meet deadlines usually results in immediate fund reversal to the cardholder, with the merchant bearing the loss.

Debit card disputes fall under Regulation E, which mandates provisional credit requirements and investigation timelines. While a consumer-favorable outcome for merchant non-response remains, procedural steps and provisional credit timing may differ from credit card disputes. Third-party processors (e.g., PayPal, Apple Pay, Google Pay) have distinct policies, often mirroring card network rules. For instance, PayPal gives sellers 10 days to respond; non-response closes the claim in the buyer’s favor. Apple Pay and Google Pay transactions route disputes through the underlying credit or debit card network, meaning the issuing bank’s rules apply.