Disputes are initiated when:

• A. A merchant refuses to respond to a chargeback.
• B. A cardholder questions a payment with their issuing bank, prompting a formal dispute.
• C. A merchant creates a retrieval request.
• D. A payment is refunded automatically.

Answer: (B)

Disputes start when a cardholder challenges a charge by contacting their issuing bank. The bank reviews the claim and, if warranted, initiates a formal dispute with the card networks, which triggers the chargeback process. This is the moment the system moves from a regular transaction to a contested one, and platforms like Stripe will then notify the merchant so they can respond with evidence.

Retrieval requests are informational probes used to gather details about a transaction; they can occur during the dispute process but they’re not how disputes are initiated. A merchant creating a retrieval request isn’t the start of a dispute. And a payment being refunded automatically isn’t a dispute at all—it’s a separate refund action.