COVID-19 dispute response guidance

We and our payment partners will continue to monitor developments within the card networks and issuing banks. We will update this guide as we learn new information that may help clarify the network dispute processes, including details to help you prepare your dispute evidence submissions.

Merchants, especially those in the travel, entertainment, and events industries, are experiencing increased dispute volume due to the COVID-19 pandemic. Government orders have affected some merchants’ ability to make goods or services available. Shelter-in-place orders have forced customers to cancel or not attend previously scheduled events. In some cases, customers are contacting their issuing banks to dispute charges. In some cases customer disputes are invalid, and card network dispute processes give merchants the right to respond to these invalid disputes by submitting evidence to the network.

In response to the increase in disputes being faced by many merchants, Visa and Mastercard have issued guidelines to answer questions about how to resolve disputes related to goods and services canceled directly because of a government order or prohibition. This guide will help you understand how to provide the best possible evidence submissions to respond to invalid disputes initiated by your customers.

General suggestions for communicating with your customers

Visa and Mastercard have similar cardholder dispute processes. Both networks have issued their own guidance to clarify their rules in light of the increased dispute activity, predominantly in the travel and events categories. Reviewing the Visa and Mastercard websites for COVID-19 related updates can help you understand the types of disputes the networks view as valid and the types of evidence you should submit to increase the likelihood of a successful outcome. Both networks, in general, advise the following:

  • If you are unable to provide a service for any reason, you should contact your customers and attempt to resolve the issue.
  • You can offer your customers a voucher or other type of credit. Whether your customers are required to accept the voucher depends on a few factors, including the reason why the good or service is unavailable, the terms of your cancellation policy and applicable laws and regulations.  
  • Cardholders who receive a refund from you are not entitled to also initiate a dispute with their issuing bank.

Many businesses are finding it difficult to understand when a customer dispute is valid or invalid and, for invalid claims, the right type of evidence to submit. You should continue monitoring the Visa and Mastercard websites for updated information that can help you understand your options.