1. Knowledge Base
  2. StudioPay
  3. Financials: Disbursements, Refunds, and Payment Disputes

Understanding Dispute Cycles in StudioPay

Learn about the actions required with dispute cycles and their potential outcomes in StudioPay.

Jump to:


Before responding to a dispute in StudioPay, understand the different dispute cycles and their possible outcomes available based on the dispute responses outlined below. 

Disputes are categorized into three different and distinct cycles: Retrieval, First Chargeback, and Pre-Arbitration/Second Chargeback

Dispute Key Terms:

  1. Cardholder: The customer that is disputing a transaction.

  2. Merchant: Provided the goods or services being disputed (most commonly the Designer.)

  3. Issuing Bank: The bank that issued the card to the customer (i.e. the cardholder’s bank.)

  4. Card Brand: The card brand the customer’s card is associated with (Visa, Mastercard, Amex, etc.)

  5. Representment: The response a Merchant sends to the issuing bank when a transaction is disputed.


retrieval occurs when the cardholder contacted their issuing bank requesting more information about a transaction, but did not request a forced refund of the transaction. 

Usually, this means the cardholder does not recognize the Merchant’s name or the transaction as it appears on their statement. Therefore, the issuing bank initiates a retrieval and requests that the Merchant provide documentation verifying the transaction details.

Because retrieval is not an actual chargeback of the payment, no funds are deducted from your balance during this dispute cycle. 

However, you still have the opportunity - and are recommended to - send a representment with relevant documentation clarifying the transaction details.

Retrieval Response Options and Outcomes

During the Retrieval cycle, there are two potential responses: Representment and Inaction (doing nothing).

After responding with one of the above options, there are two potential outcomes: 

  1. Dispute Closed - Not Escalated (Dispute Resolved)
  2. Dispute Closed - Escalated (Retrieval is escalated to First Chargeback dispute cycle)

First Chargeback

First Chargeback occurs when a cardholder seeks a forced refund from their issuing bank for a transaction that they are disputing. 

First Chargeback Response Options and Outcomes

There are numerous reasons that can cause a cardholder to initiate a chargeback, and during the First Chargeback cycle the Merchant’s response options are:

  • Accept Liability - voluntarily concede to the dispute & the held funds are credited to the cardholder

  • Representment - send compelling evidence to the issuing bank representing their side of the dispute and validating the payment

  • Inaction - doing nothing

Ultimately, the cardholder’s issuing bank will determine the outcome of a First Chargeback based on the evidence provided by both sides.

After responding with one of the above options, there are two potential outcomes: 

  1. Won - The issuing bank ruled in favor of the Merchant & the disputed funds are returned to their account balance
  2. Lost - The issuing bank ruled in favor of the cardholder & the funds are credited to the cardholder

Pre-Arbitration/Second Chargeback

If a dispute is ruled in favor of the merchant, the cardholder may present new evidence to the issuing bank that could change the initial ruling and result in a second attempted chargeback. This is commonly referred to as Pre-Arbitration.

When this occurs, the issuing bank and the Merchant - should they choose to accept Arbitration - send their respective new evidence to the Card Brand to arbitrate the dispute.

Note: Some Card Brands (e.g. Visa) follow the Pre-Arbitration cycle process for all fraud and authorization-related disputes, even if it is the first time that payment was disputed.

If the Merchant accepts arbitration during this cycle, they will work directly with the relevant Card Brand to reach a resolution. Therefore, Pre-Arbitration responses cannot be submitted in the Portal. 

The Studio Designer support team will assist you with the relevant Card Brand specific process if you need to respond to a Pre-Arbitration dispute.