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Dispute Service Apps

Dispute service apps are integrations that manage the processing of payment disputes (alerts and chargebacks) on behalf of merchants seamlessly within the platform.


Dispute Service Apps are Server to Server Apps that use the Oauth flow to obtain API Access and then use the Admin APIs and Webhooks to subscribe to store event activity.


Disputes are complaints initiated by the customer against the merchant pertaining to their orders and are categorized into two broad groups by type, Alerts and Chargebacks, see below.

  • Alerts - disputes that are not yet a chargeback, ie TC40, SAFE, and RDR alerts.
  • Chargeback - disputes that are registered as a chargeback with the acquiring bank.

Dispute Flow Overview

Below is a high-level overview of a typical flow for a dispute service app to handle transaction disputes.

Dispute Flow Detail

Step 1 - New Transaction Created

There are several scenarios that create new payment transactions:

  • Order created - nearly all new orders start with a new payment transaction.
  • Upsell created - adding an upsell creates a new payment transaction.
  • Refund created - refunding a order creates a refund transaction.

Orders typically have many associated transactions for the payments and refunds.

Step 2 - transaction.created webhook event

Dispute service apps should subscribe to the transaction.created webhook event to be notified of all payment transaction events on a store so that your app is aware of new payments, refunds, and can handle disputes properly.

Use parent_id to associate related transactions

Transaction parent_id will show the related transaction in the following cases:

  • refund transactions - the parent is the debit transaction.
  • capture transactions - the parent is the authorization transaction.
  • void transactions - the parent is the authorization transaction.

Your app can also subscribe to order.created and order.updated events to receive more detailed order information such as items purchased, fulfillment tracking numbers, and items that have already been refunded.

Create your webhook after the app is installed using the webhooksCreate Admin API and pass the transaction.created, order.created, order.updated to subscribe to these events.

Step 3 - Dispute service receives transaction dispute

At this stage, the dispute service is responsible for receiving disputes from their integration partners.

Step 4 - Dispute service creates dispute (alert or chargeback) in store

When disputes are identified as belonging to a store, the dispute service should create a new dispute using the disputesCreate Admin API.

Step 5 - Dispute service matches dispute to transaction

Disputes created in the store need to be matched to the transaction in the store to associate it with the order/customer. Disputes can be matched by passing the transaction parameter when creating or with update using the disputesUpdate Admin API. See example below in Match a Dispute.

Step 6 - Customer is added to block lists

Merchants can configure their store to automatically add customers to block lists when any of their transactions have been disputed to mitigate future risk from the customer and associated payment methods. See Block Lists guide in our user docs.

Step 7 - Dispute service creates refund

Depending on the type of dispute, the dispute service may need to create a refund using the transactionsRefundCreate Admin API to resolve the dispute. See Create a Refund detail below.

Step 8 - Dispute service resolves dispute

Once the dispute is resolved, the dispute service should set the dispute resolution using the disputesUpdate Admin API. See Dispute Resolutions and Resolve a Dispute detail below.

Creating Disputes

To create a dispute in the store using the disputesCreate Admin API, see example below:

Create dispute
POST https://{store}
"type": "alert", // dispute type
"arn": "string", // optional
"case_number": "string", // optional
"happened_at": "2019-08-24T14:15:22Z", // date when dispute occurred
"amount": "string", // dispute amount, sometimes doesnt match transaction amount
"currency": "USD", // dispute currency

Matching Disputes

To match a dispute to a transaction, pass the transaction id to the disputesUpdate API. Matching the dispute to the transaction will match the associated order and customer.

Match dispute
PUT https://{store}{id}/
"transaction": 7388

Creating Refunds

To create a refund for a transaction as part of the dispute resolution process, you can use the transactionsRefundCreate Admin API.

Create a Refund
POST https://{store}{id}/refund/
"amount": "XX.XX", // refund amount

RDR Alerts

RDR Alerts are automatically refunded with the gateway, dispute services should log an external refund for the transaction using the transactionsRefundCreate Admin API.

Setting is_external: true on a refund will create the refund without attempting the refund with the gateway.

Create an External Refund
POST https://{store}{id}/refund/
"amount": "XX.XX", // refund amount
"is_external": true // set for external refunds

Dispute Resolutions

Alert Resolutions

  • could_not_find_order - You could not match the alert to an order or transaction.
  • declined_or_canceled_nothing_to_do - Customer had declined or canceled the order; no further action is necessary.
  • issued_full_refund - Issued a full refund after the dispute was created.
  • issued_refund_for_remaining_amount - Order was already partially refunded so you issued a refund for the remaining amount.
  • 3ds_authorized_successfully - Order was approved by 3D Secure so the customer's bank is responsible for the dispute.
  • previously_refunded_nothing_to_do - Order was already refunded before the alert was issued; no further action is necessary.
  • unable_to_refund_merchant_account_closed - You are unable to refund the order because your merchant account has been closed.
  • other - None of the available resolutions matched the outcome of this alert.

Chargeback Resolutions

  • won - The chargeback representment process was successful and was resolved in favor of the merchant.
  • lost - The chargeback representment process was unsuccessful.

Resolving Disputes

To resolve a dispute, update the dispute with the appropriate resolution for the dispute type.

Resolve a dispute
POST https://{store}{id}/
"resolution": "issued_full_refund"