Dispute management workflows

  • Release version: Washingtondc
  • Updated February 1, 2024
  • 3 minutes to read
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    Summary of Dispute Management Workflows

    The dispute management workflows in ServiceNow enable card dispute agents to efficiently investigate and resolve credit or debit card dispute cases. Upon initiation by an agent, a dispute service case is created, triggering a series of tasks tailored to the case specifics. These tasks are structured into three stages: Initiate, Investigation, and Chargeback, ensuring thorough management of each dispute request.

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    Key Features

    • Initiate Stage: Agents gather additional information about disputed transactions to resolve issues early. Integrations with third-party card networks can be built to enhance this process.
    • Investigation Stage: Involves collaboration between the card network, issuing bank, merchant bank, and merchants to review transactions. The business rules engine categorizes transactions to determine appropriate actions such as provisional credit, final credit, or write-off.
    • Chargeback Stage: The dispute is escalated to the merchant's bank for reversal. Merchants can either accept the chargeback or present evidence to dispute it further. Tasks such as reporting potential fraud, converting credits, or denying refunds are handled here.

    Key Outcomes

    By leveraging these workflows, ServiceNow customers can ensure that disputes are managed efficiently, decisions are made based on established business rules, and all parties involved (customers, merchants, banks) are kept informed throughout the process. Successful management of disputes leads to timely resolutions, reduced losses, and enhanced customer satisfaction.

    As a card dispute agent or agent connector, you can work on a credit or debit card dispute cases by investigating and resolving dispute requests for cardholders.

    When an agent disputes a transaction on behalf of a customer, it initiates a dispute service case and triggers the dispute card transactions flow. This flow includes various tasks specific to the case details, and each task is created when an agent closes the previous task.

    For credit or debit card dispute management cases, tasks are generated for each transaction that has a dispute request. The playbook guides you through these tasks, ensuring you effectively manage and fulfill them based on investigations and decisions made by parties involved, such as the cardholder, card network, or merchant. With input or decisions from these parties, you, as a dispute agent, will complete tasks within the Initiate, Investigation, and Chargeback stages of a dispute case.

    Initiate

    During the Initiate stage of resolving a payment dispute, the issuing bank provides additional information to the customer about the disputed transaction to determine if the issue can be resolved at this stage.
    Note:
    To obtain the additional information, you can build an integration with third-party card networks.
    For each transaction in a case that is verified, the dispute request's status for that transaction is marked as closed.

    For each transaction in the case that is not verified, after the case is submitted, the workflow proceeds to the investigation phase. The bank's business rules engine, which has rules set by the bank, categorizes the transaction. For instance, if a disputed transaction took place more than 7 days ago, a bank's business rule might decide not to refund the cardholder.

    Investigation

    During this stage of the case, the card network, card issuing bank, merchant bank or acquirer, and merchant engage in review processes to make final determinations for each transaction. The business rules engine initiates decisions for the transaction such as:
    • Provisional credit: This decision provides temporary credit to the cardholder. For instance, if the dispute reason for a transaction is reported as a stolen card or unauthorized transaction, and the disputed transaction occurred within the past 7 days, a bank's business rule may opt for immediate provisional credit. The merchant can either resolve the issue with the customer or proceed with disputing it further.
    • Immediate final credit: This decision provides final credit immediately to the cardholder. For example, if the disputed transaction amount is below $25 USD, a bank's business rule may choose to initiate immediate final credit. If immediate final credit is decided, the dispute case progresses through the workflow to determine whether to initiate a chargeback, write off the amount, or deny credit and reverse the chargeback, returning the credit to the cardholder.
    • Write off: When issuing the final credit, the credit issuing bank reimburses the cardholder and may consider the charged amount as a loss if they believe they cannot recover the funds. A write-off occurs if a chargeback was not pursued, and the bank decides not to deny the dispute.

    Chargeback

    During the Chargeback stage, the transaction dispute is forwarded to the merchant's bank to pursue a reversal from the merchant's bank, resulting in a credit back to the customer or cardholder. The merchant can choose to accept the chargeback request or present evidence supporting the validity of the transaction. In this stage, agents or customers may complete tasks from the following:
    • Report to the card network potential fraud that was identified at the Investigation stage.
    • Initiate a chargeback and determine if a merchant provides representment, which is proof of the transaction being valid.
    • Provide final credit or convert provisional credit to final credit,
    • Deny credit- This decision determines not to refund the transaction amount, and the dispute transaction is marked as Closed Complete. If there are multiple transactions associated with the dispute case, only the transaction which is denied does not proceed further, while the additional dispute transactions within the case continue through the relevant workflow.
    • If it is determined that the merchant needs to be refunded, reverse provisional credit to refund the merchant if a chargeback has been initiated with the acquiring bank.
    If a fraud alert is generated from the bank on a transaction, a transaction has been flagged for a potential fraud, or the reason noted on the dispute is due to a stolen card, a task is created to block or reissue the card. The block card or reissue card flows run in parallel with the rest of the dispute management flow running for the various transactions being disputed.

    After a case is processed according to the final determinations for all dispute transactions associated with the case, the case is moved to the Closed Complete state.