What’s the difference between a refund and a dispute?

A refund is when the merchant agrees to return an amount of funds back to the customer's credit card. A typical reason for this can be the customer has returned goods, or is unhappy with their purchase and the merchant provides a partial refund.

A dispute occurs when the cardholder contacts their card issuing bank directly to contest a charge on their credit card statement. Reasons for this could include:

  • The card details were used without their authority (i.e. fraud)
  • The cardholder contacted the merchant for a refund but didn’t get a response
  • The goods/service provided were not as described

Read our blog post Understanding risk for small businesses accepting payments online for more information on disputes.

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