page css

Disputes

Understanding Disputes

A dispute occurs when an consumer contacts their bank to contest a payment made to you. This can happen for various reasons, and while the exact process varies across different card networks, it typically follows a standard pattern.

How Disputes Work

When an account owner disputes a charge to their payment account, Kustom takes the following steps:

  • Notifies you of the dispute through the Kustom Portal and via email.
  • Debits the disputed amount, plus a dispute fee, from your Kustom account.
  • Provides an explanation of the dispute and grants access to the account owner’s claim as submitted to their bank.
  • Guides you through the process of submitting compelling evidence to counter the dispute.

While Kustom facilitates the dispute process, the final decision is at the discretion of the account owner’s bank.

What Happens During a Dispute

When a dispute is filed, it initiates a chargeback. During this process:

  • The card network withdraws the disputed amount from your Kustom balance.
  • These funds are held for the entire duration of the dispute.
  • The disputed amount may be the full charge amount or a partial amount.

Receiving a Dispute

When a dispute is initiated, the following occurs:

  • The card network debits Kustom for the disputed payment and associated dispute fees.
  • Kustom, in turn, debits your Kustom balance for the disputed amount plus a dispute fee.
  • You cannot issue a refund outside the dispute process while the dispute is active.
  • Your dispute rate with the respective card network increases.

Dispute Timelines

Card networks generally allow cardholders to initiate disputes within 120 days of the original payment. However, certain industries—such as travel or event ticketing—may experience longer dispute windows, as the countdown often starts on the event date rather than the payment date.

Once a chargeback is created, the process follows these timelines:

  • Merchant response time: 7-21 days to submit evidence (varies by card network).
  • Issuer review period: 60-75 days to evaluate evidence and make a final decision.
  • Total dispute lifecycle: Typically 2-3 months from initiation to resolution.

The only way to expedite this timeline is to accept the dispute in the Kustom Portal.

Dispute Outcomes

At the end of the dispute process, the issuer will either:

1. Overturn the dispute in your favor:

  • The issuer returns the chargeback amount to Kustom.
  • Kustom credits this amount back to your account.

2. Uphold the dispute in favor of the cardholder:

  • No further money moves from your perspective.
  • Kustom has already credited the issuer when the chargeback was initiated.
  • The issuer returns the funds to the cardholder at their discretion.

Dispute Fees

The dispute fee depends on your country and card network, but it typically amounts to €15 or the equivalent in your local currency.

Responding to a Dispute

If you wish to challenge a disputed payment, you must submit strong evidence to the card issuer before the deadline. The only way to overturn a dispute is by responding with compelling evidence. Even if a customer claims to have withdrawn the dispute, you must submit evidence to have the dispute officially closed in your favor.

Kustom provides a streamlined process for submitting evidence via the Portal to help maximize your chances of a successful resolution.