In a chargeback, what happens after the bank opens the dispute?

In a chargeback, what happens after the bank opens the dispute?

• A. Funds and the dispute fee are withdrawn
• B. The cardholder is refunded automatically
• C. The merchant can ignore the dispute with no consequence
• D. The dispute is dismissed

Answer: (A)

When a bank opens a dispute, the transaction funds are pulled from the merchant’s account and a separate dispute handling fee is charged. This step secures the money that may later be returned to the cardholder and covers the cost of processing the dispute. The cardholder isn’t automatically refunded just because the dispute has started—the outcome is decided after the merchant submits evidence and the issuer reviews it. Ignoring the dispute isn’t an option, as the case proceeds through the formal review process and can be resolved in various ways later.

When a bank opens a dispute, the transaction funds are pulled from the merchant’s account and a separate dispute handling fee is charged. This step secures the money that may later be returned to the cardholder and covers the cost of processing the dispute. The cardholder isn’t automatically refunded just because the dispute has started—the outcome is decided after the merchant submits evidence and the issuer reviews it. Ignoring the dispute isn’t an option, as the case proceeds through the formal review process and can be resolved in various ways later.