How to Handle Squarespace Payment Disputes
TL;DR:
- Quickly identify why customers dispute charges (fraud claims, product issues, or dissatisfaction)
- Chargebacks cost you $20 plus the disputed amount, taken straight from your payout balance
- Inquiries don't carry initial fees, but chargebacks do
- Manage all disputes through your Squarespace Payments dashboard
- Strong evidence is essential if you choose to challenge a dispute
- Final decisions can't be appealed once the bank rules
Payment disputes happen to every business. The key is knowing how to handle them properly when they come up.
Understanding Different Types of Disputes
Customers dispute charges for three main reasons: they think the charge is fraudulent, they never received what they paid for, or they're unhappy with the product or service quality. Knowing which type you're dealing with helps you respond appropriately.
How Chargebacks Work
When someone disputes a charge, Squarespace immediately takes $20 plus the full disputed amount from your payout balance. If there's not enough money in your balance, they'll pull it from your connected bank account instead. This happens right away, not after any investigation.
Inquiries vs Chargebacks
Some card companies (like American Express) run inquiries before moving to full chargebacks. During an inquiry, you don't get hit with fees unless it escalates to an actual chargeback. Think of inquiries as a warning shot.
Monitoring Disputes
Squarespace sends email alerts about disputes and shows them in your dashboard. You'll typically have 20-45 days to respond, depending on the card company. Check your email and dashboard regularly because missing these deadlines means you automatically lose.
Handling a Chargeback
Once you get a chargeback notification, you have two choices in your Payments dashboard:
Accept the Dispute: You acknowledge the customer's claim. This marks the dispute as lost and finalizes the chargeback.
Challenge the Dispute: You submit evidence to fight the claim. This means gathering documentation to prove the transaction was legitimate.
Submitting Evidence
If you decide to challenge, you'll need solid proof. The bank wants to see:
- Screenshots of your terms of service and refund policies
- Delivery confirmations and tracking numbers
- Email conversations with the customer
- Any other relevant documentation
Make sure you include everything the first time. Once you submit your evidence, you can't add more later.
Finalizing the Dispute
Banks take 60-75 days to review your evidence after you submit it. If you win, the disputed funds come back to your account. The $20 chargeback fee might not be refunded though, depending on the bank's policies.
Some disputes can't be challenged at all. Discover Card disputes, for example, are automatically marked as lost in the system.
FAQs
How long does it usually take to resolve a payment dispute with Squarespace Payments?
About 60-75 days after you submit your evidence to the bank.
What happens if I miss the response deadline?
The chargeback becomes final automatically. You lose both the disputed amount and the $20 fee.
Can I challenge every dispute?
Most disputes can be challenged, but some (like Discover Card disputes) are automatically marked as lost and can't be fought.
Jargon Buster
Inquiry: A preliminary review by credit card companies before they decide whether to issue a chargeback.
Dispute: A customer's claim that a charge on their card was wrong or unauthorized.
Chargeback: When the bank reverses a transaction and moves the money from your account back to the customer.
Evidence: Documentation you provide to prove a transaction was legitimate (receipts, emails, delivery confirmations, etc.).
Finalized Chargeback: The end of the dispute process where the bank's decision becomes final.
Wrap-up
Payment disputes are part of running a business, but they don't have to be a disaster. The key is responding quickly with solid evidence when you choose to fight them. Try to resolve issues directly with customers before they escalate to disputes. This saves everyone time and keeps your payment processing smooth.
Join Pixelhaze Academy to learn more about managing your Squarespace business effectively.