AMEX responds to disputes in one of three ways:. The most common verdict is the immediate chargeback, which is the most problematic for merchants.
Merchants in turn may respond in one of the following ways:. In the case where AMEX requests additional information, merchants have 20 days to respond. They get one shot to reply and deflect the dispute. There is no representment process for the merchant to fall back on once the chargeback goes through. AMEX is not as up-front about its thresholds for its chargeback monitoring programs. High-risk merchants are often placed into monitoring in order to be able to begin processing AMEX.
Once placed into the monitoring program, AMEX will cease sending merchant inquiries and issue immediate chargebacks on all disputes.
If you are a high-risk merchant, AMEX may not be a good fit for this reason. High-risk merchants, or merchants that face a lot of friendly fraud, typically need more wiggle room in disputes than AMEX affords. If you process fraud, you want the ability to refund the transaction to the cardholder without a chargeback.
Furthermore, the merchant should have a say whether a chargeback is unwarranted; AMEX decides what is friendly fraud, and you may not be able to appeal. Their policies are also broadly similar. When Visa makes major changes to their chargeback rules, Mastercard often follows suit in order to avoid causing confusion and alienating merchants. Because so much of the focus is on Visa and Mastercard, however, merchants can sometimes find themselves going in blind when they receive a chargeback from another card network such as American Express.
This can sometimes cause merchants to make major missteps when responding to a chargeback, since the way American Express handles disputes can differ from Visa and Mastercard in a number of ways. What do merchants need to know about American Express chargebacks, how to fight them, and how to prevent them from happening in the first place? Because they carry higher interchange fees , not every merchant accepts American Express cards. Those that do are sometimes well rewarded, however, since American Express cardholders tend to make much larger purchases on average than those using Visa or Mastercard.
American Express has often targeted a more affluent segment of the population, offering a variety of perks for cardholders in exchange for charging higher fees than most credit cards. Merchants who cater to a similar customer base often accept American Express as a matter of course, since many of their customers will carry those cards.
The rules and processes can be different from those of the two largest card networks, and the best chargeback management strategy takes into account even the small quirks of how different card networks treat chargebacks.
While American Express recently started allowing certain banks to issue American Express cards, much of the time it acts as its own issuer.
For better or worse, this often allows for a shorter, more streamlined chargeback process. American Express limits cardholders to no more than two dispute filings per charge, so customers can't abuse the chargeback system by filing the same dispute repeatedly.
The second allowed dispute is intended to give a second chance to customers who file a good-faith dispute without fully understanding what evidence is required to win.
Since American Express chargebacks allow each party to submit evidence only once, a cardholder who wants to submit additional evidence must file a new dispute. This system does occasionally create extra work for merchants who have to respond to the same dispute twice, however. When a cardholder contacts American Express to dispute a charge on their account, one of two things will happen.
Remember: the point which qualifies as "Day One" will reset at each stage of the chargeback process. So, while the time limit on chargebacks is predetermined, it will still move around as one progresses to a different stage of the dispute:. American Express chargeback time limits are confusing…much like many other parts of the Amex dispute process. Without knowing how different factors affect the timeframe, however, merchants are much more likely to miss a deadline and automatically lose a case.
If you're a merchant, outsourcing chargeback management to the right professionals can free up time and ensure a much higher win rate. Contact us today to learn more about recovering revenue amid restrictive Amex chargeback time limits.
As per the Fair Credit Billing Act of , card networks are required to have a process in place to reverse charges for consumers in cases of fraud.
Like other card networks, Amex uses the chargeback process to do this. The American Express dispute time limits can vary. In most cases, cardholders have days from the original purchase date to dispute a charge.
For merchants, evidence and documentation to support your case must be submitted within 20 days of the date the chargeback or inquiry issued. This depends on the situation. Some Amex chargebacks can be resolved in a matter of days.
If the merchant wants to dispute the charge, though, it could take weeks, or even months, for a dispute to be resolved. If your American Express inquiry rate is too high, any customer disputes will escalate to the chargeback stage. If the inquiry rate remains high, you may face additional restrictions.
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