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How the Dispute Process Works

Yuyo avatar
Written by Yuyo
Updated over 2 weeks ago

A dispute in Tonder is a formal complaint initiated by a customer through their card issuer, challenging the validity of a transaction. Also known as "chargebacks".

Disputes are part of the card network ecosystem and follow strict timelines and rules defined by issuers, processors, and card schemes.

Understanding how disputes work—and how to respond correctly—is critical to protecting revenue and maintaining healthy payment operations.


What Is a Dispute?

A dispute occurs when a customer contacts their bank and claims that a transaction should not have been charged.

Common reasons include:

  • Unauthorized or fraudulent transactions

  • Goods or services not received

  • Duplicate charges

  • Dissatisfaction with the product or service

Once initiated, the dispute is routed through:
Issuer → Card Network → Processor → Tonder → Merchant


Dispute Lifecycle in Tonder

Disputes follow a structured lifecycle. Each stage requires specific actions—or inaction—from the merchant.


Dispute Statuses Explained

Needs Response

What it means

  • A customer has filed a dispute

  • Action is required from the merchant

What you must do

  • Submit supporting evidence within the allowed timeframe

Examples of evidence

  • Proof of delivery or service usage

  • Customer acceptance or confirmation

  • Transaction logs

  • User account activity

⚠️ If no response is submitted, the dispute will be automatically lost.


In Review

What it means

  • Evidence has been submitted

  • The processor and card issuer are reviewing the case

What happens next

  • No further action is required unless additional documentation is requested

  • This phase depends entirely on external parties (banks and networks)


Won

What it means

  • The card issuer ruled in your favor

  • The disputed funds are returned to the merchant

Outcome

  • The dispute is closed successfully

  • No further action is required


Lost

What it means

  • The dispute was ruled in favor of the customer

  • This can happen if:

    • Evidence was insufficient

    • No response was submitted

    • Issuer sided with the customer

Outcome

  • Funds are permanently debited

  • Dispute fees may apply depending on the processor


How to Manage Disputes in the Tonder Dashboard

You can view and manage disputes directly from the Tonder platform.

Steps

  1. Go to Dashboard

  2. Navigate to Online Payments

  3. Click Disputes

  4. Select the dispute you want to review

  5. Check:

    • Reason code

    • Deadline

    • Required evidence

  6. Upload your response and submit


Important Timelines

  • Disputes have strict response deadlines

  • Deadlines are defined by card networks and issuers

  • Late responses result in automatic losses

Always respond as early as possible, even if documentation is still being gathered.


Operational Best Practices

  • Monitor the Disputes section daily

  • Treat Needs Response as high priority

  • Use clear, concise, and relevant evidence

  • Avoid generic explanations—issuers favor factual proof

  • Keep internal records for all high-value transactions


Why Dispute Management Matters

Poor dispute handling can lead to:

  • Revenue loss

  • Higher dispute ratios

  • Increased processing fees

  • Risk of account monitoring or restrictions

Strong dispute management improves:

  • Win rates

  • Processor trust

  • Long-term payment stability


Expected Timeframes

After evidence is submitted and the dispute moves to In Review, the following timelines apply:

  • Minimum: ~30 days

  • Average: 45–60 days

  • Maximum: Up to 90 days in complex cases

These timelines are defined by card schemes (Visa, Mastercard, etc.) and issuing banks.


What Happens During This Time

While the dispute is In Review:

  • Tonder forwards the evidence to the card network

  • The issuing bank evaluates the documentation

  • The cardholder may be contacted by their bank

  • No action is required from the merchant unless additional evidence is requested

This stage is out of Tonder’s control.


How 3DS Affects Disputes

If a transaction:

  • Successfully completed 3DS authentication, and

  • The dispute reason is fraud-related (e.g. Unauthorized Transaction)

Then:

  • Liability is typically transferred to the issuer

  • The merchant has a much higher probability of winning

  • Evidence requirements are minimal, as the issuer already validated the cardholder

⚠️ Liability shift applies only to specific fraud reason codes and successful 3DS authentication.


What 3DS Does NOT Cover

3DS does not protect against disputes related to:

  • Goods or services not received

  • Product dissatisfaction

  • Refund not processed

  • Duplicate charges

For these cases:

  • Standard dispute rules apply

  • Supporting evidence is still required

  • The issuer evaluates merchant documentation


Merchant Action When 3DS Is Involved

Even if the transaction used 3DS:

  • The dispute will still appear in the Disputes section

  • You may still see Needs Response

  • You should submit available evidence, including:

    • 3DS authentication result

    • Transaction logs

    • User account activity (if applicable)

Submitting evidence ensures the liability shift is correctly applied.


Outcome Expectations

  • Fraud disputes + successful 3DS:
    → High probability of Won

  • Non-fraud disputes:
    → Outcome depends on evidence quality, regardless of 3DS


Important Notes

  • Dispute timelines cannot be accelerated

  • No intermediate status updates are provided by issuers

  • Silence during review is normal and expected

  • Final outcomes are communicated only once the issuer makes a decision

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