Is there a difference between a chargeback and a dispute?

Not all disputes become chargebacks. The chargeback is a common result of a dispute, especially when a cardholder takes their dispute to their issuing bank. In this case the dispute is the cause, and the chargeback is often the outcome. But, if the merchant can resolve a dispute through a refund or credit, the chargeback can be avoided.

It should also be noted that the payments industry is trying to move away from the term “chargebacks”. Visa for example classifies any post-transactional discrepancies as “disputes” and has created a workflow to automatically assign liability for the dispute. In the end, some disputes will end up in a debiting of the merchant account to the cardholder – a chargeback in all intents and purposes. However, you will notice in Visa correspondence they have replaced “chargeback” with “dispute.” We are currently in a transitional moment; whether this sticks or not, only time will tell.