Disputes and COVID-19

Card schemes haven't yet made changes to their dispute rules in response to COVID-19, but they are monitoring the situation to prevent excessive volumes. They have also provided guidelines to help minimize the effect of COVID-19 on the dispute process:

  • Cardholders should work directly with merchants to resolve their issue.
  • Act in good faith and make every effort to be flexible when resolving a dispute.
  • Merchants can offer credit vouchers for future use. Note, however, that you can't impose them if the customer wants to be credited back for services not received.
  • Issuers should give merchants adequate time to process a refund before initiating the dispute process.
  • Submit only valid disputes/dispute responses.

The agreed terms and conditions at the time of the transaction will prevail unless the local law states otherwise.

Frequently asked questions

My customer purchased goods/services and was told that, due to government restrictions, they cannot use the goods/services, but I am still able to provide goods/services. Are disputes raised under the category "Product/Service not received" valid?

No. The issuer does not have a right to dispute. If you are willing and able to provide the goods/services, you are entitled to be paid.


My customer purchased goods/services, but I failed to inform them of our cancellation policy at the time of the transaction, and they subsequently cancelled the goods/services. Are disputes raised under the category "Credit not issued" valid?

Yes. If you failed to disclose your cancellation policy, and you didn't agree with the customer directly, the, the issuer has the right to raise a dispute on behalf of the customer. If the services were purchased through a third-party resale site, the refund policy of that third-party sale would apply to services cancelled by the customer, not the refund/cancellation policy of the original merchant.


I chose to cancel services for my own reasons and not due to any government prohibition. Are disputes raised under the category "Product/Service not received" valid?

Yes. The issuer can pursue the dispute under this condition, because you cancelled and were unable to provide the services. Your customer must first attempt to resolve the dispute with you, unless local law prohibits the issuer from requiring the customer to first contact the merchant.


I was willing and able to provide the purchased services/goods, but the customer cancelled outside of my policy. As a courtesy, I offered a credit note/in-store credit to the customer for future use, but, before they could use it, I became bankrupt and ceased operations. Can they dispute the transaction?

No. The customer cancelled outside of your disclosed policy, so the issuer is liable for the disputed transaction.


If the customer voluntarily accepts credit for a cancelled service, does this prevent them from later disputing the original transaction?

No. If the cardholder had a right to dispute the transaction, accepting a voucher does not alter that right.


The customer bought a gift card for my store from a third-party vendor, using their card. I'm now bankrupt and have ceased operations/closed all my stores and services cannot be rendered, so the gift card has no value. Does the issuer have a right to dispute? And, if so, who is responsible for the dispute? The acquirer for the third-party vendor or my acquirer? How long does the issuer have to raise a dispute with the relevant acquirer?

Yes, if you (the merchant named on the gift card) are unable to provide the services, a right to dispute exists under the category “Product/Service not received”. The customer must first attempt to resolve the dispute with the merchant of record (the third-party vendor), unless the issuer is prohibited under local law from requiring the customer to first contact the merchant.

The dispute would be initiated against the acquirer of the third-party vendor (the merchant of record), the vendor being ultimately responsible for the transaction because it sold the gift card to the customer.

The dispute should be raised within 120 days from the transaction date, or 120 calendar days from the gift card's expiration date, as long as the latter doesn't exceed 540 days since the transaction.


My customer can make new travel arrangements, but has incurred out-of-pocket expenses. Can these costs be included in the dispute against the acquirer on the original travel purchase?

No. The dispute value is limited to the value of the services not received from the merchant that cancelled the original travel.


The customer attempted to return goods within my disclosed policy, but my stores have been closed due to government prohibition or regulation. Do they have a right to dispute?

Yes. The issuer can process a dispute. Your acquirer would be expected to refute the validly of the issuer's statements and support that you were, in fact, open and able to accept returns. If your acquirer is able to support that you were open for business, the burden of proof would fall on the issuer to prove otherwise.


If the customer calls me but is unable to get through, is that considered a valid attempt to resolve to meet dispute requirements?

Yes. Card networks consider any of the following to be valid evidence of an attempt by the customer to resolve a dispute:

  • The customer called you, but your number was out of service, disconnected or the call continued to ring without an answer.
  • The customer's email to you was returned because your email address was invalid, or you did not reply.
  • The merchant of record was contacted but referred the cardholder to a different merchant or entity.
  • The issuer certifies that they attempted to resolve the dispute with you on behalf of your customer.

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