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Chargebacks and Disputes


Account holders can submit disputes when they believe they didn't receive the goods and services they paid for or there was unauthorized activity on their financial account. A chargeback is issued if a dispute case is won and the disputed transaction is reversed. Card networks have strict rules and timelines for responding to and investigating disputes.

Highnote provides you with an in-house Disputes Intake Team that can assist with the following dispute and chargeback-related processes:

  • Handling dispute intakes from account holders
  • Managing dispute-related documentation requests and receivables for account holders
  • Investigating dispute claims
  • Filing chargebacks for disputed transactions
  • Providing direct support to account holders on the status of disputes and chargebacks
  • Issuing and settling provisional credits
  • Monitoring and maintaining regulatory requirements and timelines

This guide provides an overview of creating dispute cases and simulating the dispute and chargeback process using the Highnote API.

Provisional credits

Provisional credits are issued to an account holder during a dispute case investigation. Depending on your card product type, provisional credits may or may not be required:

  • Consumer card products: Required by Regulation E
  • Commercial card products: Optional

Provisional credits are issued from your product funding account to an account holder's financial account using an internal Highnote transfer. Internal transfers must be done using the Highnote API. For more information on using the API for internal transfers, see Transfer between Financial Accounts.

Dispute categories

Disputes fall into different categories, which must be noted when submitting a dispute case. Refer to the following table for an overview of dispute categories:

Dispute Case CategoryDescriptionExample
AUTHORIZATIONThe card program attempted to collect funds the account holder had spentA clearing transaction without an authorization event
FRAUDAccount holder claims a transaction is fraudulentAn account holder’s payment card is compromised and used for fraudulent purchases
MERCHANT_DISPUTEAccount holder claims they did not receive the goods and services they paid for from a merchantAn account holder purchased a product from an online merchant and never received it
PROCESSING_ERRORTransaction data is incorrectA duplicate charge on an account holder’s financial account

Account holder submitted dispute cases

In the live environment, the account holder or Highnote initiates dispute cases. To ensure your account holders can submit dispute cases, provide the following options:

  • Have your account holder call Highnote directly using an Interactive Voice Response (IVR) system
  • Set up email forwarding to Highnote's Disputes Intake team

When an account holder submits a dispute, the following information must be collected:

  • Dispute category
  • Account holder's full name (must match the full name on their payment card)
  • The last four digits of the payment card used
  • Transaction ID
  • Transaction posted date
  • Posted transaction amount
  • Disputed amount
  • Merchant ID
  • Summary of dispute reason and any supporting documents

When handling account holder-submitted dispute cases, ensure you follow dispute guidelines and timeframes.

Simulate a dispute case

Warning: The Highnote test environment lets you explore the platform features and functionality. It is intended for experimenting, building integrations, and training your team.

To ensure the security of your real-world data, please do not enter production data in the test environment. Production data includes sensitive information like customer details, financial data, or personally identifiable information (PII).

Use only dummy or test data explicitly created for testing purposes in the test environment.

In the test environment, you can simulate creating and resolving dispute and chargeback cases. Simulating disputes and chargebacks triggers financial account activity related to provisional, dispute, or chargeback credits and the associated notification events for case creation and resolution.

When submitting a dispute case in the test environment, you must include the following:

  • Dispute category: Provide the dispute category. For more information, see Dispute categories.
  • Dispute eligibility: The disputed transaction must be cleared and disputed within 180 days of the clearing event.
  • If multiple transactions are disputed: A separate dispute case must be submitted for each transaction.
  • If a dispute is unrelated to fraud: The account holder should contact the merchant to resolve it before submitting it to Highnote.
  • If a dispute is related to fraud: You must close any compromised payment cards associated with the account holder's financial account.

Use the following mutation to simulate a dispute:

Simulate a chargeback case

Chargeback cases are linked to the parent dispute case and are created if a dispute qualifies for filing with the card network.

If the disputed transaction is below the card product's minimum chargeback amount (set at $25 in the test environment), a chargeback case will not be initiated. Instead, a dispute credit will be issued to the financial account. For more details, see Simulate a dispute credit.

To simulate a chargeback, use the following mutation with disputeId and amount as input variables:

Simulate provisional credits

For disputed transactions, provisional credits may be issued to a financial account during the investigation. In the test environment, all consumer card products can issue these credits after a chargeback case has been created.

For credit card products, disputed transactions are removed from the account's balance due, but the available credit may not be released until the dispute is resolved in the account holder's favor.

If the chargeback case is won, the provisional credit remains. If lost, the provisional credit is revoked.

Use the following mutation to simulate issuing a provisional credit for a dispute case:

Simulate dispute credits

If the disputed amount is below the card product's minimum chargeback threshold, a dispute credit can be issued instead of a provisional credit. The minimum chargeback amount varies by card product and is listed in the feature settings.

If the disputed amount qualifies for a chargeback, a dispute credit cannot be issued. In the test environment, the disputed amount must be less than $25 to issue a dispute credit.

Use the following mutation to simulate issuing a dispute credit:

Simulate updating a dispute case

Note: Updating dispute case elements will not impact an associated chargeback case.

You can update the dispute case status to trigger additional notification events such as REJECTED and CANCELLED.

Use the following mutation to simulate updating a dispute case, providing the desired status as an input variable:

Simulate resolving a chargeback case

Resolving a chargeback case will automatically resolve the associated dispute case. The dispute case status update will also affect any provisional credits issued. The outcome will determine ledger entries and money movement. If no provisional credit was issued for a commercial card, a credit will be issued to the financial account when the chargeback is resolved.

To simulate resolving a chargeback case, use the following mutation:

Find dispute cases

You can find dispute cases by querying the following objects:

  • A financial account
  • The transaction event associated with the dispute case
  • Card product

via financial account

You can search for dispute cases and their associated transactions on a financial account using the following query:

via transaction event

You can find a related dispute case from the associated AUTHANDCLEAR or CLEAR transaction event using the following query:

via card product

You can also view a paginated list of dispute cases associated with a card product with the following query:

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