Dispute FAQs

Find the frequently asked questions about disputes.

  1. What is a dispute?

A dispute is a situation in which there is a disagreement for a particular transaction that is initiated by your customer with the issuing bank or with Cashfree Payments directly. Your customers can also go to cyber cells to report fraudulent transactions. Suspicious transaction disputes are often initiated directly by banks.

As a merchant, you can either defend the dispute by providing sufficient evidence or accept the dispute if you agree with the claim. When you accept the dispute the amount will be refunded to the customer.

Read more on disputes here.

  1. What are the various dispute types?

In Cashfree Payments, Disputes can be of the following types:

  • Dispute - End-customer complaints, fraudulent or suspicious transactions reported by law enforcement authorities and banks are raised as disputes.
  • Retrieval - These are soft chargebacks that occur even before we receive an actual chargeback.
  • Chargeback - A chargeback is a type of dispute raised on a transaction by the customer. It is a refund request that is demanded through their bank.
  • Pre-arbitration - This is the second level of chargeback.
  • Arbitration - This is the final stage of the chargeback.

Read more on the various dispute types here.

  1. What is the flow of chargeback stages??
  • Retrieval - These are soft chargebacks that occur even before we receive an actual chargeback. They are raised when your customer raises a query with their issuing bank on the transaction.
  • Chargeback - If your customer feels that the transaction was not done by them, they can raise a chargeback on top of the Retrieval request. Chargebacks can be raised directly without going through the retrieval state.
  • Pre-arbitration - The second level of chargeback. Your customer has a limited period of time within which they should revert back on whether they are disputing the transaction further or not after looking at the documents shared by you at the chargeback level.
  • Arbitration - The final stage of the chargeback. Your customer has a limited period of time within which they should revert back on whether they are disputing the transaction further or not after looking at the documents shared by you at the pre-arbitration stage. Both parties submit their documents and the card networks or NPCI takes the final decision on the dispute depending on the payment mode.
  1. What are the different dispute states?

In Cashfree Payments, Disputes can be in the following states:

  • Action Required - This indicates that the dispute is created and action needs to be taken from your end. If the evidence submitted by you is found insufficient the disputes will be visible under the Action Required section.
  • Under Review - This indicates that you have submitted the documents and Casfree Payments has forwarded your documents to the concerned authorities
  • Closed (Merchant Won) - This indicates that the authorities/customer accepts the documents and you win the dispute.
  • Closed (Merchant Lost) - This status indicates that the proofs submitted are rejected by the concerned authorities/customer and you have lost the dispute.
  • Merchant Accepted - This status indicates you have accepted the dispute raised by your customer.

Read more on the various dispute states here.


Your customer can raise a Pre-arbitration or an Arbitration even for a Chargeback (First-level) that is Closed as Merchant Won.

  1. How do disputes affect your business, and why is it important to resolve them?

Disputes can hurt your business as it damages your reputation, costs you money, and disrupts your operations.
A high number of disputes often represents that your customers are not satisfied and something needs to be improved in your business's operations, products or services. It can also lead to card networks labelling your business as high-risk and can hold remittances for your business.

  1. What is meant by dispute reason?

Dispute reason helps you identify and categorise all the various disputes. Customers can raise disputes for various reasons, some of which are:

  • If you deliver a poor-quality product and it does not meet the expectation
  • If you have delivered a wrong product
  • If you levy extra charges for your services
  • If you haven't delivered the product
  • Billing errors
  • If it is a fraudulent transaction (unauthorized transaction)

Read more on dispute reasons here.

  1. How will I be notified if my customer has raised a dispute?

You will be notified about disputes through emails or webhooks. Click here to read more about notifications.

  1. What should I do when my customer initiates a dispute?

There are 2 actions that you can take when a dispute is raised:

  • Accept the dispute if you agree with the dispute claim and the amount will be refunded to the customer.
  • Challenge the dispute with the required documents.

The dispute will be ruled in favour of the customer if you don't respond to the dispute.

  1. How do I upload the documents for contesting a case and what are the documents required?

All the disputes where action needs to be taken can be found on the Disputes page under the Action Required Tab.

Login to the merchant dashboard > Payment Gateway > Transactions > Disputes > Action Required > Take Action > Upload Documents.

Documents Required:

Document NameDescription
Delivery/Service ProofProof that the cardholder/customer did in fact receive the goods or services, such as signed delivery confirmation.
Shipping ProofProof that the address was validated via authorisation and goods were shipped to that address.
Statement of ServiceAccount Statement of wallet where funds were loaded by customer.
Proof of Service UsedCustomer acknowledgement of services used in case of a recurring transaction.
Cancellation of Service ProofDocument to support you were able to provide merchandise or service and that the cardholder/customer cancelled prior to the delivery date.
Refund ProofRefund details to the customer if done via any other mode.
Business model explanationGeneric letter elaborating how the merchant's business operates once a payment is made by the customer.
Extra Charges DeclarationTerms and conditions stating customer would be accounted for extra charges.
Terms & ConditionsTerms and conditions elaborating refund/cancellation policies of the merchant.
Customer Withdrawal LetterProof stating that the cardholder/customer no longer Disputes the transaction, or the issue was resolved with the customer.
Certificate of AuthenticityOriginal purchase receipts issued by the manufacturer that shows the products you've sold are genuine.
Reseller AgreementA legal document that authorises you to sell the manufacturer's products.
  1. Why am I debited for a dispute? When will I get the amount back?

Whenever a dispute is created, we debit merchants with the disputed amount, as banks debit Cashfree Payments on behalf of the merchant to provide provisional credit to the customer. You will get the amount back depending on the dispute result. If the dispute is closed in your favour the amount will be returned else it will be credited to your customer.

  1. When do multiple disputes occur on the same transaction?

Multiple disputes occur when there are partial disputes created on a transaction. For example, if the transaction amount was Rs. 100, and the customer has raised a dispute for Rs. 30 initially for a product. The remaining amount of Rs. 70 would be eligible for creating disputes later at some point in time.

  1. What are the deadlines for various disputes?

Following are the representation deadlines given to merchants depending on the type of dispute:

Dispute TypeDeadline
Disputes3 calendar days. In some special cases, for real-time fraudulent transaction disputes, a 1-day deadline is given.
Retrieval3 calendar days
Chargeback3 calendar days
Pre-arbitration2 calendar days
Arbitration1 calendar day