Handling Payment Disputes in Flow

What are Disputes? 

A dispute (also known as a chargeback) occurs when a customer challenges a charge made to their card. This can happen for various reasons, such as unauthorized transactions, claims of non-received products/services, or billing issues.

When a dispute is filed, the payment provider (e.g., Stripe) temporarily withdraws the disputed amount from your account. You have the option to submit evidence to prove the charge was valid.

Types of Disputes

• Card Chargeback – Funds are withdrawn immediately, and you must submit evidence to contest it.
• Card Inquiry – No funds are withdrawn unless the inquiry escalates to a chargeback.
• Other Payment Method Disputes (ACH, SEPA, Klarna, etc.) – Funds are withdrawn immediately, and these disputes cannot be challenged.

Reasons Customers File Disputes

• Product Not Received
• Subscription Canceled
• Fraudulent
• Product Unacceptable
• Credit Not Processed
• Duplicate
• General

Here's more info on Disputes reasons direct from Stripe.

Possible Dispute Outcomes

Once a dispute is filed, there are three possible resolutions:

1. You Win – If you provide compelling evidence, the bank rules in your favor, and the disputed funds (plus the dispute fee) are returned to your account.
2. You Lose – If the bank rules against you, the customer keeps the refunded amount, and you incur a $15 dispute fee (Stripe’s standard fee).
3. The Customer Withdraws the Dispute – If you resolve the issue directly with the customer and they withdraw their claim, the dispute is closed.

Important: If you take no action, the dispute automatically results in a loss after 7-21 days, depending on the card network.

Best Practices for Handling Disputes

To improve your chances of winning disputes, follow these best practices:

1. Build a Strong Case
   • Clearly explain why the charge was valid and authorized.
   • Address the specific dispute reason (e.g., "Product Not Received" → Provide proof of delivery).
2. Submit Strong Evidence
   • Include relevant supporting documents such as:
     • Signed contracts, receipts, or invoices
     • Communication history with the customer (emails, chat logs)
     • Proof of service (appointment records, delivered product tracking, etc.)
3. Follow Formatting Guidelines
   • Use clear, high-resolution screenshots.
   • Use bulleted points to highlight key details.
   • Avoid including hyperlinks (banks do not click links).
4. Respond Before the Deadline
   • You have 7-21 days to submit evidence.
   • Missing the deadline results in an automatic loss of the dispute.

How to Find and Respond to a Dispute in Flow

If you receive a dispute notification, follow these steps to respond in Flow:

1. Under Reporting > Payments in Flow, navigate to the Disputes tab.
2. Click Manage Dispute to counter that specific dispute.
3. A side bar will show more details. Click Counter Dispute to respond to it and submit evidence or Accept dispute to allow the bank to finalize the process.
4. If you clicked Counter Dispute, fill out the form on the side bar. Here's a more detailed guide for this 3-step form and templated responses for general payments and a different one for Care-related disputes.

Final Notes

• Otto serves as a facilitator and is not responsible for the dispute outcome. The final decision is made by the bank based on the evidence submitted.
• If you receive multiple disputes, consider reviewing customer communication to reduce future chargebacks.

For any questions, reach out to our support team.