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How to navigate the dispute process

  • Updated

In this guide you will find an overview of the dispute process, and your available options. When a dispute comes through there are two options as to how you can respond; either by accepting or countering the dispute. If you do not respond, the dispute will be automatically lost. For guidance on how to prepare and submit evidence for a dispute, see our help guide here.

 


What does the dispute process look like?

Here’s the typical flow when a client disputes a payment:

 

1 Cardholder contacts their card issuer or banking institution: They raise concern about a transaction (for example, an unrecognised payment, duplicate charge, or refund not received) and request a reversal.

 

2 The dispute is raised by the card issuer or banking institution: The dispute is sent from the card issuer or bank to the entity that processed the payment. For Timely Payments, this is Stripe, our payment processor.

 

3 The card issuer or banking institution hold the amount: The disputed payment is temporarily held by the bank while the investigation takes place and sometimes the bank proactively refunds their cardholder in the meantime.

 

4 Both Stripe and Timely are made aware of the dispute: Both the Timely Payments account holder (you) and Timely receive notification of the dispute.

 

5 You respond as the merchant by either: Accepting the dispute, which means the payment is then refunded to the cardholder through their bank and the dispute is closed; or Contesting it and providing counter evidence that the transaction should stand.

 

6 If the dispute is countered, the bank investigates and makes a final decision: Once the deadline closes, the bank will assess the evidence to form a decision based on the relevant card-scheme rules. When an outcome has been reached, the bank notifies Stripe and the cardholder of the outcome, and Stripe and Timely will notify you.

 

  • If the dispute is decided in your favour, the funds remain with you (and if proactively refunded to the cardholder by the bank, the funds will be taken again)
     
  • If the bank sides with the cardholder, the fee will be charged against your Timely account and the disputed amount is withdrawn from your Timely Payments / Stripe account and processed with your next payout. 
     

Important note: If funds are available in your Stripe account, this reduces your next payout. If not, the connected bank account will be debited for the negative balance. Once a decision is made, it is final and cannot be appealed through Stripe or Timely.

 

 

Handling disputes as a business owner

As a first instance, you should gather context about the payment. Have a look at the invoice and the client profile to see why they may have raised the dispute. It’s also always a good idea to try and contact the client as soon as possible to find out what prompted them to dispute this payment.


After gathering some context, there are valid reasons to accept a dispute, such as:
 

  • A refund was promised but not processed successfully.  
  • The client cancelled according to your policy and reasonably expected a refund. 
  • The payment was genuinely fraudulent (e.g. stolen card details used). 
     

In these situations, accepting the dispute can be the simplest and most customer-focused resolution. Accepting the dispute will refund the payment through the bank and close the case.

 

Timely note: You can reach out to our Support Team by following this link if you would like to confirm that the refund was issued successfully.

 

 

Accepting the dispute

This will refund the payment directly through the bank, while closing the dispute at the same time.

While the dispute fee will still apply, there may be valid reasons to accept a dispute. For example, a refund may not have been processed fully or successfully, and you still wish to return the funds to the client. Another common scenario is when a client cancelled well in advance of their appointment and expected an automatic refund. In fraudulent cases, the payment may have been made using someone else’s card details. As this is considered fraud, it is generally best to accept the dispute and return the funds to the original cardholder.

 

 

Countering the dispute

If you don’t agree with returning the funds to the cardholder you can submit evidence to counter the dispute. When doing so it’s good to keep in mind that the bank will review the evidence and they won’t be aware of your policies or procedures so it’s important to keep it factual and use screenshots/documents to provide an overview of the whole situation.

That being said, it’s always best to try and contact the client first to find out why they raised the dispute. If the dispute was raised in error then you can ask the client to withdraw the dispute with their bank.

 

Timely tip: Banks usually don’t proactively withdraw the dispute so it’s best practice to get written confirmation from the cardholder with evidence showing that they withdrew the dispute and then submitting this confirmation as your evidence.

 


If you choose to contest the dispute, what next?

If you believe the charge is valid, you have a limited timeframe to challenge the dispute by following these best-practice steps:

 

A Contact your client promptly: Many disputes happen because the customer doesn’t recognise the charge. A quick explanation can sometimes resolve confusion and prevent escalation.

 

B Ask if they are willing to withdraw the dispute: If the client agrees the charge is valid, they can request their bank to withdraw the dispute. Banks don’t always process withdrawals automatically, so it’s best to obtain written confirmation from the client and include this as part of your evidence.

 

C Don’t issue a separate refund while the dispute is active: Refunding during an open dispute can result in double loss, as the bank may still process the chargeback. If you intend to return the funds, accepting the dispute is the safest approach.

 

D Submit clear, relevant evidence: Include anything that demonstrates the transaction was valid - invoices, communications, booking details, policies, etc.

 

Timely tip: For further guidance see our help guide How to respond to a Timely payment dispute or How to prepare and submit evidence for a dispute.

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