​​A "dispute" occurs when a customer questions a payment due to issues like not receiving goods, unauthorized transactions, or dissatisfaction with a product. Efficiently managing disputes through Klarna’s Dispute API allows Partners/Merchants to respond in a structured manner, minimize financial impact, and resolve issues promptly.

Acquiring Partners who present disputes within a dashboard are required to integrate Klarna dispute handling, such that the friction of dispute handling for Klarna does not differ from other payment methods. By following these guidelines, Partners/Merchants can protect their finances and keep strong relationships with customers. Efficiently resolving disputes reduces chargebacks and builds customer loyalty.

A dispute typically progresses through several states from initiation to resolution. Understanding these states is crucial for effectively managing disputes:

Disputes can arise in various situations during a payment transaction. Below are some scenarios to illustrate different pathways to resolve disputes. A dispute is considered resolved once:

• Loss accepted: If the evidence clearly supports the customer’s claim, the Partner/Merchant may choose to accept the loss and issue a refund or replacement.
• Closed - lost: Evidence provided by the Partner/Merchant was insufficient, resulting in Klarna ruling in favor of the customer.
• Closed - won: Evidence provided by the Partner/Merchant proved that they acted appropriately and all goods were delivered as promised, resulting in Klarna ruling in favor of the Partner/Merchant.

In certain situations, it may be more practical for a partner/merchant to accept a loss rather than contest a dispute. Accepting a loss means acknowledging that the customer’s claim is valid and agreeing to resolve the dispute by issuing a refund or replacement without further investigation. This approach can save time and resources, especially when the evidence strongly supports the customer or when the cost of defending the dispute outweighs the potential loss.

Consider accepting a loss in the following scenarios:

• Strong evidence against the partner/merchant: The evidence provided by the customer is compelling, such as clear proof of non-receipt, unauthorized transactions, or defective products.
• High cost of defense: The cost of gathering and submitting additional evidence, such as legal fees or operational costs, exceeds the amount in dispute.
• Customer relationship considerations: Maintaining a positive relationship with the customer may be more valuable than the disputed amount, especially in cases involving loyal customers or high-value transactions.
• Small disputed amounts: When the amount in dispute is relatively small, it may not be worth the effort to contest the dispute.

Accepting a loss can have several implications:

• Financial adjustments: The disputed amount will be refunded to the customer, and any associated fees, such as chargeback fees, will be applied to the partner/merchant.
• Impact on payouts: Accepting a loss may result in adjustments to your payouts, depending on the payment method and terms of the dispute.
• Customer trust: Resolving the dispute quickly and amicably by accepting a loss can enhance customer satisfaction and loyalty.

The process for accepting a loss typically involves the following steps:

1. Review the dispute: Assess the evidence provided by the customer and determine if accepting the loss is the best course of action.
2. Use Klarna’s dispute API: To accept the loss, make the appropriate API call through Klarna’s Dispute API. This action will close the dispute and trigger the refund process.
3. Document the decision: Keep a record of the decision to accept the loss, including any evidence reviewed and the reasoning behind the decision. This documentation can be valuable for future reference or internal audits.
4. Encourage partner/merchant to communicate with the customer: Proactively notify the customer that their dispute has been resolved in their favor. This communication should be clear, concise, and appreciative, reinforcing a positive customer experience.

Providing shipping or delivery evidence is crucial in resolving disputes where a customer claims non-receipt of goods or delayed delivery. By submitting clear and accurate evidence, you can substantiate that the goods were shipped or delivered as agreed. This evidence plays a vital role in defending against disputes and ensuring that the resolution process is fair and transparent.

Importance of Shipping/Delivery Evidence: In disputes involving non-receipt or delayed delivery of goods, shipping or delivery evidence is often the deciding factor. This evidence helps verify that the transaction was completed according to the terms agreed upon by both the partner/merchant and the customer. Without this evidence, the dispute is likely to be resolved in favor of the customer, potentially leading to financial loss and a negative impact on your business’s reputation.

You can submit various types of evidence to support your case, including:

• Shipping receipts: Documentation that confirms the goods were shipped to the customer’s address.
• Tracking numbers: Unique identifiers provided by the shipping carrier that allow tracking of the shipment’s progress.
• Delivery confirmations: Proof from the shipping carrier that the goods were delivered to the specified address. This may include a signature or electronic confirmation.
• Shipping labels: Images or scans of the shipping label that was attached to the package, showing the destination address and other relevant details.

To effectively upload and submit shipping or delivery evidence, follow these steps:

1. Gather the necessary documents: Collect all relevant documents related to the shipment, such as tracking numbers, shipping receipts, and delivery confirmations.
2. Use Klarna’s dispute API: Access Klarna’s Dispute API to upload the evidence. The API allows you to attach files and submit them as part of your response to the dispute. Ensure that the documents are clearly labeled and easy to identify.
3. Verify the information: Before submitting, double-check the evidence to ensure it is accurate, complete, and directly related to the disputed transaction. Incorrect or incomplete evidence may weaken your case.
4. Submit the evidence: Use the API to upload and submit the evidence. Once submitted, Klarna will review the documentation as part of the dispute resolution process.
5. Track the dispute status: After submitting the evidence, monitor the status of the dispute through Klarna’s webhooks or API updates. This will help you stay informed about any further actions required.
6. Maintain records: Keep copies of all submitted evidence for your records. This can be useful for future disputes or internal audits.

1. Dispute Preliminary Outcome

The dispute concludes with a preliminary decision, marked as either favorable to the merchant or not.

2. Eligibility Check for Appeal

• Eligibility Condition to Appeal:
• The merchant is informed about the preliminary outcome.
  
  • Dispute preliminarily outcome: Reversal.
  
• The preliminary outcome must have the specific reason code indicating potential eligibility as listed below
  
  • Merchant_did_not_adjust_statement_on_klarnas_request
  
  • Merchant_did_not_follow_klarnas_shipping_policy
  
  • merchant_did_not_update_order_as_requested
  
  • Merchant_did_not_perform_promised_refund
  
  • Could_not_send_another_request.
  
• The merchant must not have accepted the loss or failed to respond within the initial response deadline.
  
  • merchant_accepted_the_loss.
  
  • merchant_did_not_reply_to_dispute_request
  

3. Appeal Submission Period

• Appeals must be submitted within 10 calendar days of the preliminary dispute outcome, under the "Arbitration Appeal" status.

4. Submitting an Appeal

• Merchants can submit an appeal with the following:
  
  • A written summary explaining why the preliminary decision was incorrect.
  
  • Identification of any evidence they believe was overlooked in the initial decision. This must be evidence that was already provided; new evidence is not allowed.
  
  • Single challenge limitation: Merchant can only appeal the outcome of a dispute once.
  

Methods of Submission:

• MDA (Merchant Disputes App):
  
  • Click the "Appeal" button.
  
  • A modal will appear with questions relevant to the dispute reason and a mandatory field for summarizing Klarna's error in the decision-making.
  
• API V3:
  
  • Endpoint: /appeal
  
  • Body: Attachment along with a summary of the perceived mistake in Klarna's initial decision.
  

5. Appeal Review

• Investigation Process:
  
  • Upon submission, the appeal is reviewed by Klarna.
  
  • The SLA for a review is 5 days (max length of appeal is therefore 10 + 5 days)
  
  • If the appeal is successful, the original decision is overturned.
  
  • If unsuccessful, the original decision remains.
  

Decision-Making:

• If the same decision is upheld, Klarna must state why they believe the decision is still valid.
• If a different decision is made, Klarna must document what was previously missing or misjudged.

6. Monitoring and Controls

• Appeal Monitoring:
  
  • Klarna documents reasons for overturned resolutions to improve the initial resolution process.
  
  • A Partner with more than 30% of their appeals rejected in the past month may be temporarily barred from arbitration.
  

7. Consequences

• Partners must adhere strictly to the appeal submission guidelines, including the use of initial evidence only.
• If there are signs of a Partner abusing the appeal process, that may result in temporary suspension from the appeal process.
• Improper challenges leading to a 30% or higher rejection rate result in temporary suspension from the appeal process.