A customer who wants their money back has two routes. They can ask you, or they can ask their bank. The second route is called a chargeback, and the difference between the two is not a matter of etiquette. It changes who holds the money while the argument happens, who decides the outcome, and what the episode costs you even when you are plainly in the right.
Most sellers meet their first chargeback without understanding any of that, and respond as though it were a refund request arriving through an unusual door. It is not.
The money leaves first
In a refund, you decide. In a chargeback, the cardholder’s bank decides, and it decides provisionally in their favour before you have said anything. The transaction amount is pulled back out of your account, and a fee is added on top for the privilege of having been disputed.
That fee is the part people underestimate. It is charged by your acquirer or payment provider rather than by the card network, it commonly sits somewhere between fifteen and fifty of whatever currency you trade in, and in most arrangements you do not get it back even if you win. On a large order that is an irritation. On a twenty-euro order it means the dispute costs more than the sale was worth, which is a fact worth knowing before you spend an afternoon assembling evidence.
You can contest it. The process is called representment: you submit evidence, the issuing bank reconsiders, and if it still disagrees the case can escalate to the card network for arbitration, which carries its own and considerably larger fee. Most small sellers should stop before arbitration almost every time.
What they are actually claiming
Every dispute arrives with a reason code, and the code determines what evidence is relevant. Submitting the wrong kind of proof is the most common way to lose a case you should have won.
| What the dispute says | What it means | What actually rebuts it |
|---|---|---|
| Fraud, card not present | Someone says they did not make this purchase | Matching address and security checks, device and IP history, prior undisputed orders from the same customer |
| Goods or services not received | They paid and nothing arrived | Tracking showing delivery to the billing address, signature, or access logs for anything digital |
| Not as described, or defective | It arrived and was wrong | Your listing as it stood, photographs, specifications, and any correspondence where they described it accurately |
| Recurring payment cancelled | They say they stopped the subscription | The cancellation terms they accepted, plus a log showing no cancellation request was made |
| Credit not processed | You promised a refund that never came | Proof the refund was issued, with its date and reference |
| Duplicate or wrong amount | Charged twice, or charged more than agreed | The authorisation and settlement records for each transaction |
The uncomfortable category is the first one. A sizeable share of disputes filed as fraud are not fraud at all: the cardholder made the purchase, forgot, did not recognise your trading name on the statement, or found it easier to call the bank than to email you. The industry calls this friendly fraud or first-party misuse, and the only reliable defence is prevention rather than argument.
The clock, and the ratio
Two numbers govern the whole business.
The first is the filing window. For most consumer disputes a cardholder has around 120 days, counted from the transaction or from the date delivery was expected, which for a pre-order or a service booked months ahead can land long after you considered the sale closed. Some scenarios stretch considerably further. Your own window to respond, by contrast, is short, often measured in days, and missing it loses the case by default.
The second is your chargeback ratio: disputes as a proportion of transactions. Cross a threshold and you enter a card network monitoring programme, which brings fines, mandatory remediation and, at the far end, the loss of your ability to accept cards at all. The exact thresholds differ by network and have been revised more than once in recent years, so the useful move is to ask your acquirer where your account currently stands rather than trusting a figure from an article. What is stable is the principle: the programmes trigger on a fraction of one per cent, which is a much lower tolerance than most new sellers assume.
What actually reduces them
Almost everything that works happens before the dispute exists.
- Fix your billing descriptor. If your statement name is a holding company nobody has heard of, you are generating disputes out of nothing. Make it the name on the website.
- Make cancelling easy and obvious. Every subscription cancellation you obstruct becomes a chargeback with a worse outcome and a fee attached.
- Answer quickly. A large share of disputes are filed by people who tried to reach you first. A reply within a day is the cheapest dispute prevention available.
- Keep delivery evidence by default. Tracking to the billing address, and for digital goods a timestamped access log. Retrieving this later is painful; capturing it automatically is not.
- Refund early when you are going to lose. A refund costs you the sale. A lost chargeback costs you the sale, the fee and a mark on your ratio.
- Use the fraud tools you are already paying for. Address verification, security codes and 3-D Secure shift liability on fraud disputes rather than merely flagging them, which is a different and better thing.
None of this is glamorous and all of it is cheaper than the alternative. The underlying logic is that the system is built to protect cardholders, deliberately and for good reasons, and a seller who treats it as a court to be won in has misunderstood the game. It is a cost to be kept small.
Common questions
Can I just refuse to deal with it?
You can decline to contest a dispute, and sometimes that is the right economic call. What you cannot do is prevent the money being taken, because it has already gone. Ignoring disputes also leaves your ratio climbing, which is the part that eventually costs you the account rather than the order.
Does winning get my fee back?
Usually not. Most providers treat the fee as the cost of processing the dispute rather than a penalty, so it stands whichever way the case goes. A few refund it on a win. It is worth finding out which kind you have, because it changes the threshold at which contesting is worth your time.
Is a chargeback the same as a dispute under consumer credit law?
No, though they are often confused. Chargebacks are a card network rule, not a statute. Separately, some countries give credit card holders a statutory claim against the card issuer for certain purchases, which is a different mechanism with different limits. A customer may have both routes available, and the two are decided under entirely different rules.
Do 3-D Secure and similar checks actually help?
For fraud disputes specifically, yes, because a properly authenticated transaction generally shifts liability to the issuer rather than leaving it with you. They do nothing for disputes about delivery or product quality, which is why a seller with a not-as-described problem will not fix it by tightening authentication.
How long should I keep the evidence?
Longer than you think, because the filing window runs from delivery rather than from payment and some categories extend well past a year. Keeping order, delivery and correspondence records for a couple of years is a reasonable default, and storing them automatically matters more than storing them thoroughly.
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