A chargeback is a card transaction reversal initiated through the cardholder’s issuer under card-network dispute rules. It can remove the transaction amount from the merchant and may add a separate dispute fee.
Why are chargebacks filed?
Reasons include alleged fraud, non-receipt, duplicate processing, incorrect amount, canceled recurring billing or goods not as described. Each reason follows defined evidence and timing rules.
What happens after a dispute?
The issuer sends the dispute through the network to the acquirer or processor. The merchant may accept it or submit evidence. The transaction can move through representment and further review depending on scheme rules.
How is the financial impact measured?
A $2,000 disputed payment with a $25 chargeback fee creates an immediate $2,025 debit, before considering product cost, shipping and staff time. Recovery is not guaranteed even when evidence is submitted.
What evidence may help?
Relevant evidence can include authentication results, order details, signed contracts, proof of delivery, communications, refund policy and evidence that the descriptor was recognizable. Requirements depend on the reason code.
How can chargebacks be reduced?
Use clear descriptors, accurate billing, delivery evidence, responsive support, controlled recurring payments and appropriate authentication. Monitor root causes rather than only the total count.
