What happens when a customer disputes a Klarna payment?

When a customer pays a deposit, vehicle reservation, or any other payment using Klarna through iVendi Pay, the dispute process works differently from standard credit or debit card chargebacks. Klarna is built to give retailers an opportunity to resolve complaints directly with the customer before any penalties or formal chargebacks occur.

Further information on Klarna disputes can be found in the Stripe documentation.

Key Things to Know

1. Customers dispute via the Klarna App: Buyers have up to 180 calendar days from the transaction date to report an issue or pause payments.
2. 21-day grace period (Inquiry Stage): Unlike standard card chargebacks, Klarna disputes almost always start as an informal Inquiry. You have 21 days to speak with the customer and resolve the issue with zero dispute fees.
3. No evidence can be submitted during the Inquiry: Klarna does not accept delivery notes, invoices, or handover packs while the dispute is in the Inquiry stage—they expect you to contact the buyer directly.
4. Fees are only kept if you lose: A dispute fee is held only if an inquiry escalates to a formal chargeback. If you contest it and win, that fee is refunded in full.

The Two-Stage Dispute Lifecycle

Stage 1: The 21-Day Inquiry (Your Opportunity to Resolve)

When a customer raises an issue (e.g., they want a refund on a warranty, decided not to proceed with a reservation, or claim an item was missing), Klarna pauses their scheduled repayments and opens an Inquiry. You have 21 calendar days to take one of three actions:

Action	How It Works	Financial Outcome
1. Agree & Resolve with Customer	Contact the customer directly to address the issue. Once satisfied, the customer withdraws the dispute inside their Klarna app.	No fees. Transaction remains intact.
2. Issue a Refund	If the customer is entitled to a refund (e.g., a refundable holding deposit or returned accessory), issue the refund directly via the iVendi / Stripe payment record.	No dispute fee. The inquiry automatically closes.
3. Let It Escalate	If you cannot reach an agreement or the claim is invalid, take no action during the 21 days. The inquiry will automatically roll over to Stage 2 so you can formally defend it.	The disputed amount and a temporary dispute fee are held from your payout balance.

Important: If a customer only disputed a partial amount (e.g., a £100 add-on from a £500 total deposit), issuing a matching £100 refund will automatically resolve the dispute without fees.

Stage 2: The Chargeback Phase (Submitting Evidence)

If the inquiry isn't settled within 21 days (or in rare cases involving suspected fraud), the dispute becomes a formal Chargeback.

• Deadline to respond: You have 12 calendar days to submit your counter-evidence. (For unauthorized/fraud disputes, this window is reduced to 5 calendar days.)
• Single-round rule: Klarna only allows one submission. You cannot upload additional documents later, so provide everything in your initial response.

Evidence Checklist by Scenario

When contesting a chargeback via the iVendi platform, provide clear, dated records:

• Warranties & Mechanical Breakdown Cover: Signed customer policy schedule or certificate of insurance, signed terms confirming the 14- or 30-day cooling-off period has passed, proof of policy registration with the administrator, and any claims history.
• Service Plans & Maintenance Packages: Signed service plan schedule detailing payment intervals, workshop job cards or technician stamps proving completed servicing, and signed cancellation terms.
• Paint & Interior Protection: Pre-delivery inspection (PDI) sheet signed upon collection showing treatment application, and customer handover acknowledgment confirming receipt of the care pack kit.
• Vehicle Reservations & Holding Deposits: Signed digital reservation agreement detailing deposit terms, refundable status conditions, and the agreed vehicle completion window.
• Direct Customer Communication: Direct email or SMS chains showing policy documents were delivered, collection dates agreed, or cancellation terms clearly explained.

What Happens Next?

• If Klarna rules in your favor: The withheld funds and the temporary dispute fee are immediately credited back to your dealership's payout balance.
• If Klarna rules in the customer's favor: Klarna returns the disputed funds to the customer, and the dispute fee is retained by the network.

Best Practices to Prevent Klarna Disputes

1. Always retain signed handovers: Never release a vehicle or goods without a physical or digital signature confirming receipt and condition.
2. Process agreed cancellations promptly: If a buyer cancels a refundable reservation before collection, issue the refund within 48 hours rather than leaving it pending.
3. Monitor notifications: Check your notification emails or payments tab regularly so you never miss the 21-day inquiry window.