Chargebacks and Disputes
A chargeback happens when a customer contacts their bank to challenge a transaction rather than seeking a refund directly from you.
If this occurs, Fiserv (our payment processor) will auto-dispute the chargeback to provide a window for you to "represent" the charge and submit evidence against illegitimate claims.
Key Facts About the Dispute Process
Bank-Led: The process is governed by the customer’s bank (the issuer), not by Mallow or Fiserv.
Immediate Impact: When a dispute is filed, the disputed funds are temporarily withdrawn from your account. They are returned to you only if you win the case.
Associated Costs: Each dispute carries a processing fee. Additionally, a high "dispute-to-sales" ratio can lead to account monitoring, increased scrutiny from card networks, or account closure.
How to Handle a Dispute
If you receive a dispute notification, follow these steps immediately to improve your chances of a reversal:
Act Fast: You have a strict deadline (often 30 days or less) to respond. Missing this window will result in an automatic loss.
Gather Evidence: Collect every piece of documentation related to the sale, including:
Signed contracts and invoices
Proof of delivery or service completion
Communication logs (emails/texts) with the customer
Your signed terms and conditions or refund policy
Submit via CardPointe: Upload your evidence through the CardPointe application. This is the secure portal where Fiserv gathers your data to present to the customer's bank.
You can find a link to the CardPointe app inside of your Mallow portal. Go to the Merchant Hub tab > Disputes > Click on the "Open CardPointe" button.
Proactive Prevention
The best way to manage disputes is to stop them before they start:
Clear Billing Descriptors: Ensure the name that appears on a customer’s bank statement is easily recognizable as your business.
Informative Invoices: Follow all invoicing best practices, including proper branding, including merchant and client information, thorough descriptions, and accurate pricing.
Accessible Policies: Clearly display your return, refund, and cancellation policies on your website and invoices.
Proactive Communication: Most disputes arise from confusion. Resolving an issue directly with a customer is always faster and cheaper than a bank-led chargeback.
Robust Documentation: Always have signed contracts and detailed invoices for every client.