When a transaction is disputed a charge of £15 is made by Stripe. This is refunded if the dispute is successfully challenged, and you are able to demonstrate that the goods/service was provided to the customer.
In our experience, dispute charges are rarely overturned - despite you providing evidence that a digital service (the mobile app ticket) was delivered successfully to the customer.
This article is aimed at providing guidance to keep dispute charges to a minimum - through proactive transaction monitoring and coordinating efforts with your customer service team.
When a customer disputes a transaction
When a transaction is disputed by a customer, this means that they have raised that they do not recognise the transaction with the issuing bank. This triggers steps that may be familiar to you as a consumer. The bank cancels the card meaning that no further transactions can be made from that account, and the customer is issued with a new card and new account details.
In all cases, it is unlikely that the customer would invoke these steps unless they genuinely believed they have been a victim of fraud. It is far more likely that they have been a victim of 'card testing'.
A disputed transaction will automatically refund the customer and remove the corresponding ticket from their account.
Proactive transaction monitoring
The best approach we have seen to combat dispute charges is to proactively monitor transactions, by putting in place an internal review procedure.
It's also important to remember that just because a charge passes the bank's security checks, or is authorised by the bank, this is no guarantee that it is legitimate. Fraudsters do sometimes have possession of the full card details, so it is crucial to regularly review your charges and orders to make sure they make sense and don't raise suspicion. After all, you have the most information about your customer and what they've ordered and are in the best position to make the final decision regarding any charge. You should consider questions like:
- Does this order make sense for a normal customer?
- Has the customer made any unusual requests?
- Did the charge pass the security checks?
- Does the email address make sense when compared with the customer/cardholder name (for example, a customer name of John Smith but the email address of firstname.lastname@example.org presents higher risk)?
Because you do not have the customer in front of you, as a brick and mortar retail establishment would, you cannot fully verify the individual presenting the card for payment. You must then use the knowledge and data at your disposal to make a final determination of legitimacy. There are many ways to review your orders to avoid fraud. Stripe provide guidance to avoid fraud on their website.
Co-ordinating efforts with your customer service team
When a customer contacts your customer support team to raise that they have a transaction on their statement from you, but do not recognise it - this is a good indication that they have had their card details stolen. At this point, they have not reported the card stolen with their bank and therefore no dispute has been raised in Stripe.
To avoid dispute fees on these transactions, which are very likely to follow after the customer contact, we recommend refunding the transaction from within Passenger Cloud. This will remove the ticket from the account and associated device, and importantly will refund the transaction to the card. When this card is reported stolen, no dispute fees will be attributed to these transactions as you will have already issued a refund.