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