Disputes are an unfortunate part of accepting payments online, but the good news is that they are generally uncommon. A dispute (also known as a chargeback) occurs when a cardholder questions your payment with their card issuer (for example: Discover, Chase, etc).
The issuer then creates a formal dispute which immediately reverses the payment and deducts it from your bank account balance. A separate $15.00 dispute fee levied by the card network is also deducted at this time.
There is a dispute resolution process through which we can help you respond and submit evidence to make your case that the payment was valid. If the dispute is found in your favor, the disputed amount is returned back to you. In addition, our payment processor (Stripe) will reimburse you for the dispute fee, as they feel its users should not be financially impacted by an invalid dispute.
If a dispute is upheld, the card issuer’s decision is final and the cardholder’s payment + dispute fee will remain unreturned. We're unable to manage/refund these fees on our end, so that's why recommend that if at all possible, advisors DO challenge the dispute and submit any evidence -- as outlined below -- that can impact the decision in their favor!
The most common reasons why clients dispute a payment they've made for advisor services through AdvicePay are:
A) they forget they've paid for the service, so they tell their card issuer they don't recognize it
B) they or someone they've authorized on the account (e.g. a spouse) don't recognize the charge, which shows up as your firm name, "AdvicePay," or sometimes "Stripe" (our payment processor) on their statement
How to respond:
If one of these situations might apply to your client, we recommend:
- Reaching out to the client regarding the disputed payment
- Asking the client whether they'd be willing to reverse it with their credit card company
- Acquiring a letter from the credit card company stating that they withdrew the dispute
- Submitting the letter to us
- Allowing us to submit the letter on your behalf to our payment processor, Stripe, before the evidence submission deadline
Our experience has been that as long as your client withdraws their dispute and we submit the evidence from their credit card company, you should expect to win.
If for any reason your client doesn't receive the letter from their credit card company before the deadline, in the meantime they can also submit:
- A personal letter stating the facts of the dispute and their withdrawal
- Screenshots of any email/online communication with their credit card company
- Screenshots of the dispute reversal as reflected on their online credit card statement
It's not guaranteed, but sometimes we are able to send in the letter from the credit card company late IF the client has provided evidence such as the above before the submission deadline.
Disputing Your Services
A client could also dispute a payment saying that they didn't receive the service or that the service received was not as described.
How to respond:
1. First, get in touch with your client. If you understand why they filed the dispute, there is a chance for you to explain the misunderstanding or to make it right.
Having your client withdraw the dispute is by far the best way for you to make sure a dispute is resolved in your favor. However, whether they agree to do this or not, you should still submit evidence for the dispute.
2. Next, we encourage you to provide us with a copy of your contract and any other evidence that shows they [did intend to pay for your services / did receive the services agreed upon] and we will submit it to Stripe on your behalf.
Just as in the case of "accidental" disputes, Stripe will automatically refund your client when they dispute a charge and the money + $15 dispute fee will come out of your bank account.
If the dispute is resolved in your favor then the original charge, as well as the dispute fee, will automatically be reimbursed to you. If you lose the dispute, then you will not be reimbursed.
Deadline for evidence submissions
There is a deadline to submit evidence to Stripe -- we'll let you know what yours is right away when we begin working with you on the dispute. It's important to get evidence in on time!
When will I hear whether I've won or lost the dispute?
Disputes can take a while to process. Even if your client gets back to you right away and we submit our evidence immediately, it can take 6 weeks for the banks/credit card companies to communicate with each other and fully resolve the issue.
We will make every effort to work with the team at Stripe to try to get it finished in a more timely manner!
How to prevent disputes
It makes sense to invest in dispute prevention efforts, as overall it takes much less time + energy compared to responding to a dispute once it's already happened!
Some of the things we do to help reduce invalid fraud disputes is letting all clients know in every payment confirmation email what the charge may look like on their statements. We also offer reminders + tips about recognizing the charge in our client-side help desk when showing clients how to make a payment.
There are also some things you can do to prevent a dispute from a client -- particularly one that is unintended/accidental:
- Communicate to clients about the AdvicePay platform, and tell them that their online payments will be processed through a company called Stripe. You can let them know that while we've set charges made through the app to default to your firm name, banks and credit card companies don't always honor that. Therefore, they may find that the charge on their statement appears as AdvicePay, Stripe, or Stripe.com.
- Advise clients that it can be helpful to save or print out their invoices, then refer to them when reviewing their monthly statement.
- If desirable, set invoices to accept ACH only. It's generally much more difficult to dispute ACH authorized payments compared to credit cards.