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Introduction to Disputes

A guide to handling payment disputes in the Kustom Portal.

Updated this week

What is a dispute?

A dispute occurs when a customer contests a payment—typically through their bank or card issuer. Common reasons include:

  • The item never arrived

  • A return wasn’t processed

  • The discount wasn’t applied or pricing was incorrect

  • The charge is unrecognized or suspected fraud

Some issues start as warnings or enquiries and may escalate to formal disputes if unresolved.

Managing disputes in the Kustom Portal

You can view and handle all relevant disputes directly in the Kustom Portal—unless the order predates the Klarna upgrade.

Where to respond

  • Before Kustom upgrade: Disputes are handled in Klarna’s Merchant Portal. A redirect link is shown on the homepage if applicable.

  • After Kustom upgrade: All disputes are handled directly in the Kustom Portal.

    • Open Kustom Portal and sign in to see and manage disputes.

    • Navigate to Disputes in the menu.

    • Click on the dispute to open the detailed view. where you can respond and see more information.

      • To challenge the dispute, click Counter dispute.

      • Select the reason why you should win the dispute, and click Next.

      • Enter and attach all the applicable supporting evidence. The recommended label indicates the best documents for the type of dispute.

      • After entering all the evidence, verify the information is correct by selecting the checkbox.

How to view and find both Klarna and Kustom disputes in the Kustom Portal

Dispute types and statuses

Disputes in the Kustom Portal are grouped into two categories: Enquiries and Chargebacks. The table below outlines what each status means:

Status

Dispute Type

Description

Klarna equivalent

all

All disputes, regardless of status ´

-

warning_needs_response

Enquiry

The issue is open; the merchant may issue a refund. If unresolved, it may escalate to a dispute.

no response required

warning_under_review

Enquiry

The customer has self-reported a return and provided tracking information to the issuer (e.g. Klarna, bank, or card provider such as Visa, Mastercard or AMEX) Merchant action is still possible.

-

warning_closed

Enquiry

The enquiry is closed.

-

open

Chargeback

The dispute is open and requires action. Evidence must be submitted to avoid automatic loss.

response required

under_review

Chargeback

The dispute is under review; evidence has already been submitted to the issuer.

-

lost

Chargeback

The dispute is closed and the merchant lost.

-

won

Chargeback

The dispute is closed and the merchant won.

-

Note: Enquiries are not formal disputes and won’t incur fees unless escalated. Chargebacks are formal disputes with potential financial implications.

How to respond

  • The Kustom Portal guides you through your response based on the dispute reason.

  • The form follows Visa and Mastercard standards and adjusts accordingly.

  • Upload the required evidence or accept the dispute directly in the form.

Your options:

  • Accept the dispute – If you agree with the customer.

  • Challenge the dispute – Provide all requested information and evidence.

Key reminders

⚠️ You only get one chance to respond – no follow-ups allowed.

⚠️ Missed the deadline? The dispute is automatically lost.

⚠️ All outcomes are final – there is no appeal process.

Localized labels

In the Kustom Portal, "Dispute Inquiries" may appear with localized translations:

  • English (en-GB): Dispute inquiries

  • German (de-DE): Streitanfragen

  • Finnish (fi-FI): Kiistakyselyt

  • Swedish (sv-SE): Tvisteförfrågningar

  • Norwegian (nb-NO): Tvisteforespørsler

  • Danish (da-DK): Tvisteforespørgsler

Card disputes

When a customer disputes a card payment directly with their bank. These disputes are often linked to suspected fraud or unrecognized charges.

How to respond

You have limited time to act (usually 7–21 days, depending on the card network).

Choose to:

  • Accept the dispute – You agree and the funds are lost permanently.

  • Challenge the dispute – Submit strong, relevant evidence.

Timeline: Card disputes can take 2–3 months for a final decision.

Key reminders

⚠️ You only get one chance to respond – no follow-ups allowed.

⚠️ Missed the deadline? The dispute is automatically lost.

⚠️ All outcomes are final – there is no appeal process.

Dispute fees:

Kustom receives a non-refundable dispute fee from the customer's bank and passes this cost to the merchant. The fee amount depends on the buyer's country, not the merchant's location, and remains non-refundable even if you win the dispute.

Buyer country

Currency

Card dispute fee (in local currency)

EEA

EUR

15

UK

GBP

15

Switzerland

CHF

15

Norway

NOK

150

Denmark

DKK

150

Sweden

SEK

150

Poland

PLN

65

Czech Republic

CZK

400

US

USD

15

Canada

CAD

15

Australia

AUD

25

New Zealand

NZD

25

Bulgaria

BGN

30

Hungary

HUF

5250

Romania

RON

75

Klarna disputes

Handled differently than card disputes — Klarna disputes have two phases.

Enquiry and Chargeback Disputes

An enquiry dispute begins when a customer challenges an order. The dispute remains active until it is:

  • Withdrawn by the customer

  • Closed by Klarna

  • Escalated to a chargeback dispute

During the enquiry phase, Klarna directs customers to contact the merchant directly to resolve the issue. You have 21 days to work with the customer and prevent escalation.

⚠️ Exception: Fraudulent transactions are immediately escalated to chargeback disputes.

Enquiry Disputes

Enquiry disputes are an early step that can help you avoid chargeback fees. At this point your best strategy is to communicate directly with the customer. For example, if an order is just delayed, you can let the customer know it's on the way. They might choose to cancel the dispute.

You have two options for handling an enquiry dispute:

  • Accept the dispute – Agree to the refund and issue it to avoid any chargeback fees.

  • Let it escalate – If no action is taken within 21 days*, it automatically becomes a chargeback dispute. At that stage, you’ll be able to submit evidence.

*This process may be different in some cases.

Refund requests as Enquiry Disputes

Customers using Klarna often initiate enquiry disputes as a way to request refunds. Disputes labeled with the reason code Network reason code: Return are often just refund requests. Contact the customer to confirm their request and process the refund if needed.

Chargeback Disputes

If the enquiry isn’t resolved after 21 days, Klarna escalates it to a chargeback dispute. Kustom will now place a hold the disputed amount and the potential dispute fee.

Your options:

  • Submit one structured response within 13 days.

  • Win the case – The funds and fee are returned.

  • Lose the case – Kustom deducts the amount and Klarna refunds the customer.

Key reminders

⚠️ You only get one chance to respond – no follow-ups allowed.

⚠️ Missed the deadline? The dispute is automatically lost.

⚠️ All outcomes are final – there is no appeal process.

Dispute fee

If a dispute is lost, a non-refundable fee will be charged based on the customer’s country. Kustom is charged this fee by Klarna when a chargeback dispute is lost, and this cost is passed on to the merchant.

Buyer country

Currency

Klarna Dispute fee (in local currency)

EEA

EUR

20

UK

GBP

20

Switzerland

CHF

20

Norway

NOK

200

Denmark

DKK

200

Sweden

SEK

200

Poland

PLN

90

Czech Republic

CZK

550

US

USD

15

Canada

CAD

20

Australia

AUD

25

New Zealand

NZD

25

Bulgaria

BGN

40

Hungary

HUF

7000

Romania

RON

100

Billie disputes

How to respond when a customer disputes an invoice through Billie.

What happens during a Billie dispute

When a customer files a dispute through Billie, Kustom places a temporary hold on the disputed amount until the issue is resolved.

Common reasons for Billie disputes

Buyers may raise disputes for several reasons:

  • Goods not received – The order wasn’t delivered or only partially delivered.

  • Returns – The buyer returned some or all of the items.

  • Incorrect invoice – The invoice has issues like missing items or an unapplied discount.

  • Faulty goods – The items were damaged, incomplete, or had quality problems.

  • Already paid – The buyer says the invoice was already paid, either to Billie or directly to you.

  • Unauthorized order – The order wasn’t approved by the buyer’s company.

How to respond to a Billie dispute

You can challenge the dispute by submitting evidence in the Kustom Portal that proves the order was fulfilled correctly. Submit this within 12 calendar days to ensure a fair review.

Relevant evidence includes:

  • Tracking ID and shipping date

  • Proof of delivery or confirmation of service

  • Purchase proof for digital items (e.g., IP address or email receipt)

  • Purchase proof for physical goods or services (e.g., phone number or signed receipt)

  • Refund confirmation if the order was already refunded

Be as specific and detailed as possible. Use the information from the customer’s checkout to support your case.

Key reminders

⚠️ You only get one chance to respond – no follow-ups allowed.

⚠️ Missed the deadline? The dispute is automatically lost.

⚠️ All outcomes are final – there is no appeal process.

How do disputes work in Kustom compared to Klarna?

Disputes reported via Klarna function largely the same way as you may be used to—but with some important differences in status names and when action is required.

Dispute flow overview

When a customer disputes a Kustom order, the case enters a status called warning open. This is Kustom’s equivalent of Klarna’s no response required. It serves as an early alert that a customer has raised an issue, but no immediate action is required from you at this stage.

A 21-day countdown begins from the moment the dispute is created. If the situation is resolved within this window (for example, by registering a return), the case is automatically closed without further action. However, if the issue remains unresolved after 21 days, the dispute escalates to open —at which point a response is required from you.

Common example: unregistered returns

Many of the disputes fall under this category:

  • A customer initiates a dispute because their return hasn’t been registered

    • If you as a merchant register the return before the 21-day deadline, the case closes automatically

    • If you register the return after the case has escalated to open, the dispute is marked as lost and a dispute fee is charged

This is due to that the shopper (your customer) was correct in their claim: the return was not registered at the time the dispute was reviewed.

Fees and resolution timing

For Klarna disputes: Klarna and Kustom only charges a fee if you lose a dispute after it has escalated.

  • If you resolve the dispute within the 21-day window, no fee is applied

  • Escalated and lost disputes will result in a dispute fee

Summary of statuses

Kustom status

Klarna equivalent

Action required

warning_needs_response

no response required

no immediate action, monitor

open

response required

must respond to the dispute

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