The Disputes policy outlines conditions under which chargebacks can be filed and how the merchant will respond to them.

The Refund policy outlines how customers can request refunds and the conditionsthat must be met.

Disputes won’t reliable prevent chargebacks discussing proper use of chargebacksin our terms and conditions may divert some buyers away from disputes and towardproper channels. It’s essential to detail the process for resolving disputes, includingtimeframes, steps, and required documentation to provide customers with a clearpath for dispute resolution.

Refunds involve returning money to a customer after a transaction. Refund processexplains  conditions for refunds and the timeframe for refunds.

A dispute occurs when an account owner contacts their bank to contest a payment to Oak Key for a number of possible reasons.

When an account owner disputes a charge to their payment account. Merchant:

Inquiries

Some card networks initiate a preliminary pase before creating a formal dispute and chargeback. Merchant calls this preliminary phase an inquirí, through theseare sometimes also called a “retrieval” or a “request for information”.

American Express and Discover are the networks that most often use this phase, while Mastercard and Visa don’t use it anymore.

During the inquiry phase, the cardholder’s bank requests transactionclarification, often because the cardholder doesn’t recognize the transactiondescription. Oak Key can resolve the case without incurring a dispute fee byeither providing satisfactory evidence that answers the dispute type for the inquiry, or by issuing a full refund. Inquiries on partially refunded charges can still escalate to a chargeback.

During the dispute

Whether it’s because of an inquiry that escalated, or for some other reason, when an account owner files a formal dispute against a payment, the actioninitiates a chargeback where the card network pulls the funds for the dispute from Oak Key’s balance and holds it for the entire duration of the dispute. This might be for the full amount of the charge or a different amount.

Receiving a dispute

The initiation of a dispute triggers several processes:

Timing

Card networks typically allow cardholders to initiate disputes within 120 daysof the original payment, but their rules allow more time in some situations..Generally speaking, when a customer makes a payment for something that willhappen in the future (like a vacation reservation, a professional servicesappointment, or an event ticket), the clock starts on the date of the event, not the date of the payment.

Following the creation of the chargeback, Oak Key has a limited amount of time (usually 7-21 days, depending on the card network) to respond to the cardissuer.

If Oak Key submit evidence, the issuer also has a limited amount of time (usually 60–75 days, depending on the card network) to evaluate the evidenceand decide the outcome.

The full lifecycle of a dispute, from initiation to the final decision from the issuer, can take as long as 2-3 months to complete. There are no actions a business can take to reliably accelerate this timeline, other than to decline to contest the dispute by accepting it in Merchant’s Dashboard.

At the completion of the dispute process, the issuer either overturns the dispute in Oak Key’s favor or upholds the dispute in their cardholder’s favor.

If the issuer overturns the dispute, they return the debited chargeback amount to Merchant, and merchant passes this amount back to Oak Key.

If the issuer upholds the dispute, nothing changes from Oak Key perspectiveand no money moves, Merchant credited the issuer when they initiated the chargeback. The issuer will return the funds to the cardholder at some pointduring or even after this process. The timing of the cardholder’s credit isentirely at the issuer’s discretion.

Dispute fees

The dispute fee for Oak Key can be found on the Merchant’s Pricing page. This fee is deducted from Oak Key’s account balance when a cardholder initiates a dispute.

For Oak Key the dispute fee for a won or withdrawn dispute might be returned.

Responding to a dispute

In most cases, you have the ability to challenge a disputed payment, as long as Oak Key submit strong evidence to the card issuer that invalidates the dispute claim before the deadline.

As soon as a dispute is active, the only way to overturn it is by submittingevidence in a response. Even in cases where account owner claims to havewithdrawn the dispute, Oak Key must respond with evidence for the dispute to be closed in Oak Key’s favor. Submitting evidence is what signals to the issuerthat Oak Key doesn’t accept the dispute and want to have the funds returned to Oak Key.

After the decision

After Oak Key submit evidence, the next notification from the card issuer to both Merchant and Oak Key is the final decision. Merchant updates the status ofthe dispute to won or lost and notifies Oak Key through the MerchantDashboard, email, and any other configured communication channels as soon as the issuer makes its decision clear.

This outcome is final for all parties. Oak Key can’t overturn a lost dispute, butaccount owner also can’t overturn a dispute decided in Oak Key favor.

Merchant takes responsibility for reimbursing Oak Key for the disputed amountand waiving associated dispute fees for qualifying transactions.

Oak Key is not obligated to assemble evidence validating the legitimacy of the transaction

Oak Key can cancel a payment before it completes at no cost.

Refunds can be issued after a successful payment, but they might incur a fee.

Refunds use Oak Key available balance (excluding pending amounts).

Chargeback

A chargeback is a transaction reversal that occurs when a customer disputes a charge on their credit card. The chargeback process is initiated by the customer, who contacts their bank or credit card issuer to request a refund. The bank or issuerthen contacts the merchant’s bank to reverse the transaction. Chargebacks are typically used when a customer believes that they have been charged incorrectly orfraudulently.

It is a form of consumer protection that allows customers to dispute unauthorizedtransactions or transactions that were not fulfilled as promised. Chargebacks can occur for various reasons, such as fraud, goods or services not delivered, ordefective merchandise.

Refund

A refund is a return of funds to the customer by the merchant. It is a voluntaryaction taken by the merchant to provide customer satisfaction or to rectify a mistake. Refunds can be issued for various reasons, such as dissatisfaction with a product or service, accidental overpayment, or cancellation of an order.

Refund is a transaction reversal that occurs when a merchant agrees to return a customer’s money. Refunds are initiated by the merchant, who agrees to return the customer’s money for a valid reason, such as a defective product or unsatisfactoryservice. Refunds are typically used when a customer is dissatisfied with a product orservice, but does not believe that they have been charged incorrectly orfraudulently.

While both chargebacks and refunds result in the return of funds to the customer, the key difference is in who initiates the transaction. Chargebacks are initiated bythe bank or credit card issuer, while refunds are initiated by the merchant.

After examining the differences between chargebacks and refunds, it is clear thatthese are two distinct processes that consumers can use to resolve issues withmerchants. A chargeback is a dispute filed with the issuing bank, while a refund is a return of funds directly from the merchant.

Chargebacks are typically used as a last resort when a merchant is unresponsive orunwilling to provide a refund.

On the other hand, refunds are a simpler and more straightforward way to resolveissues with a merchant. Consumers should always try to resolve issues directly withthe merchant before filing a chargeback, as this can help to avoid unnecessary fees and complications.

Overall, understanding the difference between chargebacks and refunds can helpconsumers to make informed decisions when resolving issues with merchants.

 5. Review

​This policy will be reviewed on an annual basis.