The Disputes app within the Klarna Merchant Portal is an essential tool designed to empower you to efficiently and effectively manage and resolve payment disputes directly from your dashboard. This guide provides an in-depth look at each feature of the Disputes app, ensuring you can navigate it with confidence.
If you are looking for a specific dispute, the search function allows you to quickly locate it using various criteria:
- Dispute ID: Klarna’s unique identifier for the dispute.
- KRN (Klarna Reference Number): The reference number associated with the transaction.
- Order Number: Your internal order number.
- Customer Name: The name of the customer who initiated the dispute.
- Customer Email Address: The customer’s email address.
- Merchant Reference: Your internal reference for the transaction.
Open Disputes
After a customer initiates a dispute, you have a window of up to 21 days to resolve the issue directly with the customer. If a resolution isn’t reached within this timeframe, Klarna will step in to begin an investigation.
The “Open disputes” page is your central hub for managing disputes that require your attention. It prioritizes disputes based on their deadlines, ensuring that the most urgent cases are always at the top of your list.
This page is organized into two key tabs:
- Response Required: This tab lists disputes that are awaiting your action. To respond, simply click the ‘Respond’ button to access the dispute detail page. Here, you can present your defense and submit your response to Klarna.
- Under Review: Disputes in this tab are those you have already responded to. These cases are now ready for review by Klarna’s Dispute Resolution team, who will work towards a resolution.
Fields in the “Open disputes” Page
The “Open disputes” page provides a clear overview of each case with the following fields:
- Dispute ID: Klarna’s unique Dispute ID for easy identification.
- Merchant ref: Your reference to the corresponding order.
- Reason: The reason selected by the customer when raising the dispute.
- Dispute created: The date when the customer initiated the dispute with Klarna.
- Deadline: The date and time by which you must respond to the dispute. Disputes are ordered by the urgency of this deadline.
- Assigned user: If you’ve assigned the dispute to a team member, their username will be displayed here.
- Status: The current status of the dispute. Common statuses include: response required, under review, no response required, and closed. For a detailed explanation of each status, refer to Klarna’s documentation.
- Action: This column provides the actions you can take, such as responding to or viewing the open dispute.
Unauthorized Purchases
The “Unauthorized purchases” page mirrors the structure of the “Open disputes” page but focuses exclusively on disputes categorized as “Unauthorized purchases.”
These disputes are flagged by customers as potential fraud. Due to their sensitive nature, these cases have a shorter response deadline of 7 days (168 hours), compared to the 14-day deadline for general disputes like ‘returns.’
High-Risk Orders
The “High-risk order” page is also structured similarly to the “Open disputes” page.
It’s important to note that “High-risk order” is not a dispute reason initiated by the customer. Instead, these orders are proactively identified by Klarna’s internal fraud monitoring systems. These systems are in place to protect you from potential fraudulent transactions.
“High-risk orders” are extremely time-sensitive. It is crucial to monitor this page closely and take immediate action to cancel high-risk orders before products are shipped.
All Disputes
The “All disputes” page provides a comprehensive overview of every dispute related to your Klarna transactions. This includes:
- Disputes recently raised and not yet assigned to Klarna’s Dispute Resolution team.
- Disputes where Klarna’s Dispute Resolution team is actively involved and requires information from you.
- Disputes you have responded to and are currently under review.
- Disputes that have been fully resolved.
On the “All disputes” page, cases are organized by the “dispute created” date, with the oldest disputes appearing at the top.
This page is further divided into four tabs for easier management:
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All: A complete list of all disputes, regardless of status (response required, under review, no response required, closed).
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Open: Displays disputes needing your input or those under review after you’ve submitted information.
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No response required: Includes disputes within the initial resolution time or in the early stages of Klarna’s investigation.
Resolution time: During this period, Klarna pauses the invoice, allowing you and the customer time to resolve the dispute independently.
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Closed: Shows all resolved disputes. For legal compliance, cases are removed from the Disputes App 180 days after resolution.
Email and Dispute Settings
The “Email & Dispute Settings” page is divided into “Email & Notification” and “Chargeback Threshold” sections.
Administrators can use this page to manage contact emails, notification languages, and chargeback thresholds. The ‘Local’ language option refers to the language of the market where the order was placed.
The “Email & Notification” section includes four sub-sections:
- Disputes: Configure a single email address and language for notifications related to general disputes for each Merchant ID (MID).
- Unauthorized Purchases: Set up multiple email addresses to receive notifications for unauthorized purchase disputes for each MID.
- High-Risk Orders: Add multiple email addresses for notifications concerning high-risk orders for each MID.
- Notifications: Customize the frequency of reminder notifications for each dispute category: “Disputes”, “Unauthorized Purchases”, and “High-Risk Orders”.
Chargeback Threshold
Administrators can define a chargeback threshold for each currency and MID. If a dispute remains unresolved after the 21-day resolution period and the disputed amount is below the set threshold, Klarna will automatically resolve the dispute by issuing a chargeback to the merchant, without requiring further action from you.
Example: If a merchant sets a threshold of 10 EUR. For disputes unresolved after 21 days, Klarna will automatically issue a chargeback if the disputed amount is 10 EUR or less, bypassing the dispute request to the merchant.
Benefits of Chargeback Thresholds:
- Reduced resource allocation for defending low-value disputes.
- Elimination of dispute fees for automatically charged back disputes.
Maximum Chargeback Thresholds
To prevent accidental errors, Klarna has implemented maximum threshold amounts:
| Currency | Amount |
|---|---|
| EUR | 50 |
| SEK | 500 |
| NOK | 500 |
| DKK | 500 |
| GBP | 50 |
| PLN | 500 |
| USD | 50 |
| CAD | 50 |
| AUD | 50 |
| NZD | 50 |
| CZK | 1000 |
| RON | 250 |
| CHF | 50 |
| MXN | 1000 |
Statistics
The Disputes app dashboard provides valuable insights into customer dispute behavior, your performance in dispute resolution, and associated costs.
The data dashboard is segmented into sections, each with information boxes and charts, explained below. Detailed descriptions are also accessible via the information icon in the top right corner of each box within the Merchant Portal.
All returns & disputes raised: The total number of disputes initiated within the selected time frame.
Returns per orders: The percentage of returns compared to the number of orders placed in the same month (excluding non-return disputes). Adding this to “Disputes per Orders” gives the total dispute rate.
Disputes per orders: The percentage of disputes raised compared to the number of orders placed in the same month (excluding returns). Adding this to “Returns per Orders” gives the total dispute rate.
Calculated total loss: Your total losses converted into a single currency for easy overview.
This chart summarizes all disputes raised with Klarna, highlighting the number and percentage of disputes that proceeded to investigation due to not being resolved within the initial resolution period.
Return & Dispute Reasons: This chart breaks down the reasons for disputes and their distribution across different categories.
Returns & Disputes Outcome: This chart shows the outcomes of resolved disputes based on the reason for closure.
Loss reasons: This chart displays the distribution of cases where losses were incurred, categorized by the reason for the loss.
This chart provides an overview of the categories where you have incurred losses and dispute-related costs.
Dispute fee: Fees charged to cover operational expenses related to disputes you are responsible for, or cases where resolution extends beyond the designated timeframe after investigation begins.
Merchant accepted loss: Chargebacks resulting from disputes you accepted, either individually or through the chargeback threshold.
Merchant lost: Chargebacks for cases resolved in the customer’s favor, resulting in a loss for you.
This chart provides a breakdown of the categories for which dispute fees have been incurred.
Merchant refunded after investigation started: Dispute fees for cases where you issued a refund after Klarna intervened and began investigation.
Merchant accepted loss: Dispute fees for cases where you accepted the loss and a chargeback.
Merchant lost: Dispute fees for cases where you lost the dispute and a chargeback was issued.
If you identify areas for improvement, Klarna offers a comprehensive Merchant Improvement Guide with tips to reduce disputes and enhance customer experience.
Dispute Statuses
Understanding dispute statuses is crucial for effective management within the Disputes app. Here’s a breakdown of each status:
1. No response required
This status encompasses two scenarios:
- Initial Resolution Time: After a dispute is raised, Klarna pauses the invoice to allow you and the customer to resolve the issue directly. No action is required from you at this stage, and a deadline is not yet set.
- Initial Investigation Phase: If direct resolution fails, Klarna’s Dispute Resolution team begins an investigation. Initially, the status remains “No response required.” You can view basic dispute information by clicking ‘View.’ Once Klarna gathers information from the customer and requires your input, the status will update to ‘Response required,’ and a deadline will be set automatically.
2. Response required
Once Klarna’s investigation begins (after the initial resolution period), and they need your input, the status changes to “Response required.”
A dispute request is sent with a deadline for information submission. The initial deadline is 14 days (336 hours) for most dispute reasons, and 7 days (168 hours) for Unauthorized Purchases. Subsequent follow-up requests have a 7-day deadline each, with a 60-minute window to add to your response after initial submission. After the deadline, you can no longer defend the case.
- Note: Adyen integrations may limit follow-up requests to a single request.
3. Under review
“Under review” indicates that you have submitted your response, and Klarna’s Dispute Resolution team is now reviewing the case to reach a resolution.
4. Closed – Merchant won
This status signifies that the dispute has been closed, and you successfully defended your position.
5. Closed – Merchant lost
“Closed – Merchant lost” means the dispute was resolved in favor of the customer, and you are liable for payment. A chargeback will be initiated against you.
6. Closed – Merchant refunded order
This status indicates that you resolved the dispute by directly refunding the order. Common examples include processing a customer return and issuing a refund.
7. Closed – Merchant accepted loss
If you choose to accept the loss for a dispute request, the status will be updated to “Closed – Merchant accepted loss.” Klarna will then resolve the dispute by issuing a chargeback.
8. Closed
“Closed” status for “high-risk orders” differs slightly. As these are not typical customer-initiated disputes, they don’t result in a “won” or “lost” outcome. These cases are resolved when you either cancel the order or provide shipping information if the order was already dispatched.
Responding to Open Disputes
To respond to a dispute, click the ‘Respond’ button on the ‘Open Disputes’ page. This will direct you to the individual dispute page where you can submit your response.
Accepting Loss for Multiple Disputes
The ‘Open Disputes’ page allows you to take bulk actions. For example, to accept losses for low-value disputes, select multiple disputes using the checkboxes and click ‘Accept Loss.’ Selecting the header checkbox will select all disputes across all pages (only available if all selected disputes share the same currency and have a dispute amount).
To efficiently identify disputes for accepting loss, sort by ‘Dispute amount’ (lowest to highest) or use the ‘Dispute amount’ filter.
Important: Accepting loss results in immediate chargebacks. A confirmation step is required after clicking ‘Accept loss’ to prevent accidental chargebacks.
The information requested for each dispute can vary. The following outlines the standard information requested when a dispute is raised and when a formal request is sent via the Merchant Portal and the API.
1. When a Dispute is Raised
When a dispute is initially raised, the following information is available:
- Klarna Reference
- Reason for Dispute
- Merchant Information
- Dispute Date
- Deadline
- Status
- Assigned User (if applicable)
- Disputed Products
- Merchant Reference 1 & 2
- Order Date
- Dispute ID & KRN
- Dispute & Order Amounts
- Capture ID & Amount
- Customer Name and Email Address
2. When a Request is Sent
When Klarna sends a formal request for information, the dispute page will include a communication box with:
Communications Box
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Dispute date
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Status (Unresolved, Responded, Closed)
-
Deadline (specific date and time)
-
Requirements (information requested)
-
Attachment area
-
Your response section (varies by dispute reason)
-
‘Add reply’ field (optional comments)
-
Optional Attachment (max. 7.3MB)
The expected handling and information requests vary based on the dispute reason:
1. Return
Klarna will inquire if the return has been received. If yes, you should adjust the order invoice accordingly. If you received the return but do not accept it, explain your reasoning in the ‘Add reply’ section.
Selecting ‘Yes, will make changes to the order’ commits you to issuing a refund equal to the disputed amount. Failure to refund within 96 hours will result in an automatic chargeback.
Response options include:
- Have you received the return?*
- Yes, will make changes to the order
- Yes, but not accepted (Please specify why)
- Return not received
- Add reply (optional)
- Attachment (optional)
2. Goods not received
Klarna will request shipping details and proof of delivery: shipping date, carrier, tracking number, delivery time, delivery address, and recipient name.
Information fields include:
- Tracking ID
- Shipping company (dropdown menu)
- Shipping date (dd/mm/yyyy)
- Comment field
- Proof of delivery upload (max. 7.3MB)
- Attachment (max. 7.3MB)
3. Faulty goods
These disputes often require more nuanced communication. Klarna may ask if you have contacted the customer and if an agreement has been reached (refund, replacement, etc.).
Response options:
- Add reply (optional)
- Attachment (max. 7.3MB)
4. Incorrect invoice
You will need to provide evidence to demonstrate the invoice’s accuracy, especially if the customer claims a missing discount.
Response options:
- Add reply
- Attachment (max. 7.3MB)
Flagging Disputes as Suspected Fraud
For managed merchants, you can flag disputes as “Friendly Fraud” when defending a case. Contact your account manager for details on eligibility.
When responding to a dispute, you can check the ‘Flag this dispute as suspected Fraud’ box in the comment section. This informs Klarna’s Dispute Resolution team that you believe the customer’s claims are deliberately false.
Important: Only flag cases as suspected fraud with substantial evidence. Include all relevant documentation when submitting your response. Disputes from customers with high return rates are not automatically considered fraudulent.
Klarna’s Dispute Resolution team thoroughly reviews all evidence from both parties before making a decision.
Unauthorized Purchases: Detailed View
1. Description
‘Unauthorized purchases’ are reported when a customer claims they did not authorize the transaction, indicating potential fraud victimization.
2. Timeline
Due to the sensitivity, requests for information on unauthorized purchase disputes are sent immediately with a 7-day (168 hours) deadline.
3. Requested Information
The requested information varies by order type:
For Services:
- Confirmation if the service was used.
- Details of customer communication.
- Service delivery method (e.g., email).
For Physical Goods:
- Shipping information and proof of delivery.
- Customer communication details.
- Customer-specific information.
For Tickets and Travel:
- Possibility of cancellation/refund.
- Confirmation if the ticket was used.
- Customer communication details.
- Customer-specific information.
- Ticket delivery method (e.g., email).
All fields are mandatory for response submission. You have a 60-minute window post-submission to add information or attachments. Follow-up requests (up to 5 maximum) also have a 7-day deadline each.
High-Risk Orders: Detailed View
1. Description
High-risk orders are flagged by Klarna’s systems as potentially fraudulent, often involving unauthorized use of personal or payment information.
2. Timelines
Given the urgency, high-risk order requests have a 96-hour deadline.
3. Expected Actions
If possible, cancel high-risk orders immediately. If shipped, provide shipping information and attempt to halt delivery.
4. Requested Information
If the order shipped, provide shipping information for each shipment. If shipping details were already provided during order placement, no resubmission is needed. Klarna will retrieve the information internally.
Why Disputes Are Lost
Understanding why disputes are lost can help you improve your processes and prevent future losses. Common reasons include:
1. Deadline Expired
Failure to respond to dispute requests within the given timeframe results in liability for the dispute, as per contractual agreements. A chargeback will be issued, and the case will be resolved in favor of the customer. Timely responses are crucial.
2. Invalid Proof
Providing insufficient or invalid proof when defending a dispute will result in a loss. For example, lacking proof of delivery for a ‘goods not received’ dispute. In such cases, a chargeback will be issued, and the dispute resolved for the customer.
3. Loss Accepted
Choosing to accept the loss for a dispute immediately closes the case and results in a chargeback, resolving the dispute in favor of the customer.
Updating Customer Service Information
Ensuring your customer service information is up-to-date in the Merchant Portal is vital for a smooth customer experience, especially during disputes. Klarna displays this information to customers raising disputes, directing them to your support channels.
To update your Customer Service Information:
- Click “Settings” (bottom left corner of the Merchant Portal).
- Select “Customer Service Information”.
Customer Service Information Fields
The “Customer Service Information” section presents the following editable fields:
- MID (Merchant ID): Identifies your merchant account.
- Market: Select the market for which the information applies. “Global” applies the information to all markets without specific local information.
Contact Information:
- Customer Service Email: Your primary customer service email address.
- Customer Service Phone Number: Your customer service phone number. For urgent issues or complex disputes, having a readily available Klarna customer service phone number or your direct line can significantly improve resolution times and customer satisfaction. Ensure this number is actively monitored and can handle merchant inquiries related to disputes.
- Contact Form URL: Link to your customer service contact form.
- Chat service URL: Link to your live chat service, if available.
Return Policy Information:
- Return Policy URL: Link to your detailed return policy page.
- Days Limit for Return & Refund Policy: Specify the number of days customers have to return items and request refunds.
Updating this information ensures customers are directed to the correct support channels and are aware of your policies, contributing to a more efficient dispute resolution process and improved customer relations. Remember to keep your Klarna Customer Service Phone Number and other contact details current for optimal support accessibility.
