📋 Overview

You've received notice that a customer has disputed a charge with their credit card issuer. Chargebacks occur when a cardholder contacts their bank to reverse a transaction. You have a limited window to respond with compelling evidence, or the funds will be permanently returned to the cardholder - and you'll pay a chargeback fee.

⚠ Respond Quickly

You typically have only 7-14 days to respond. Missing the deadline means automatic loss.

🕒 Chargeback Ratio

Too many chargebacks (over 1%) can put your merchant account at risk or increase processing fees.

💰 True Cost

Chargeback = lost sale + lost product + chargeback fee ($25-100) + time cost to fight.

Common Chargeback Reason Codes

  • Fraud (Visa 10.4, MC 4837) - Cardholder claims they didn't authorize the transaction
  • Not as Described (Visa 13.3, MC 4853) - Product/service differs from description
  • Not Received (Visa 13.1, MC 4855) - Customer claims item never arrived
  • Credit Not Processed (Visa 13.6, MC 4860) - Refund promised but not issued
  • Duplicate Processing (Visa 12.6.1, MC 4834) - Customer charged twice
  • Canceled Recurring (Visa 13.7, MC 4841) - Subscription charged after cancellation
$450
Professional Chargeback Response

Evidence compilation, representment letter, and follow-up for high-value disputes.

Schedule Review

🔍 Evaluate the Dispute

Before fighting a chargeback, assess whether you can win and whether it's worth the effort. Some chargebacks are legitimate; others are "friendly fraud."

Win Probability by Reason Code

Chargeback Type Key Evidence Needed Win Rate
Fraud - Card Not Present 3D Secure, AVS match, IP address, device fingerprint 20-30%
Item Not Received Tracking showing delivery to billing address 60-80%
Not as Described Product listing, photos, specs, customer communications 30-40%
Duplicate Charge Proof charges were for different orders 70-90%
Canceled Recurring No cancellation request received, terms of service 40-50%

📄 Transaction Evidence

  • ✓Order confirmation email
  • ✓Payment receipt/invoice
  • ✓AVS and CVV match results
  • ✓IP address and device info

📝 Fulfillment Evidence

  • ✓Shipping tracking number
  • ✓Delivery confirmation/signature
  • ✓Photos of packaged item
  • ✓Customer communications

⚠ "Friendly Fraud" Is Common

Studies show 60-80% of chargebacks are "friendly fraud" - the customer received the goods but disputes anyway. They may have buyer's remorse, want a free product, or forgot the purchase. Fight these with strong evidence.

🛡 Evidence to Win

The key to winning chargebacks is compelling evidence. What you need depends on the reason code.

For Fraud Claims

Show the real cardholder made the purchase: AVS match (billing address), CVV match, 3D Secure authentication, IP address matching customer's location, device fingerprinting, customer's prior purchase history, communications from customer's email.

Strong case: AVS match + CVV match + customer emailed about order + multiple prior purchases from same card.

For "Item Not Received" Claims

Tracking confirmation showing delivery to the billing address is critical. Signature confirmation is ideal. If shipped to different address, show customer provided that address. Photos of packaged item with label visible can help.

Strong case: Tracking shows delivered to billing address with signature.

For "Not as Described" Claims

Product listing screenshots, photos showing accurate description, specifications, customer's original order confirmation showing what they ordered vs. what they claim. Any communications where they acknowledged receiving correct item.

Strong case: Listing matches delivered product + customer initially confirmed satisfaction.

For "Canceled Subscription" Claims

Terms of service they agreed to (with timestamp), lack of cancellation request in your records, the cancellation policy they accepted. If they did cancel, show charge was before cancellation or per your policy.

Strong case: Clear cancellation policy + no cancellation request received before charge.

For Services Rendered

Signed contract, proof of service delivery, customer's acknowledgment of completion, before/after photos, communication logs, login records if digital service.

Strong case: Signed completion acknowledgment + ongoing usage after service date.

🚨 Evidence That Doesn't Help

  • Your internal records alone (need customer-facing documentation)
  • Delivery tracking to different address than billing (without proof they requested it)
  • Claiming "they should have contacted us first" (not required)
  • Terms of service if not clearly presented before purchase

⚖ Response Options

Based on your evidence, choose the appropriate response strategy.

Fight with Compelling Evidence

If you have strong evidence (delivery tracking, customer communications, AVS/CVV match), submit a detailed representment package.

  • Best for clear friendly fraud
  • Worth the time investment
  • 60-80% win rate with good evidence

Accept the Chargeback

If the customer has a legitimate complaint or you lack evidence, accept the loss. Fighting wastes time you won't recover.

  • Saves time on unwinnable cases
  • Better for customer relations
  • Focus resources on prevention

Issue Refund (Pre-Representment)

If you see a dispute before chargeback is final, proactively refund. This avoids the chargeback fee and ratio impact.

  • Avoids chargeback fee
  • Protects chargeback ratio
  • Quick resolution

Arbitration (Last Resort)

If you lose representment but strongly believe you're right, you can request arbitration. But fees are $250-500 and you pay if you lose.

  • Only for high-value disputes
  • Expensive if you lose
  • Rare circumstances only

📊 Fight vs. Accept Calculator

Example: $200 transaction chargeback

Transaction amount$200
Your cost of goods sold$80
Chargeback fee$25
Time to fight (1-2 hours @ $50/hr)$50-100
Win probability (with strong evidence)60%
Expected value of fighting$120 - $75 = $45
FIGHT IF EV > 0 & HAVE EVIDENCEWorth fighting

💡 Chargeback Ratio Management

Card networks flag merchants with chargeback ratios above 0.9-1%. Even if you win disputes, the chargebacks still count. If your ratio is near the threshold, prioritize prevention over fighting: better fraud detection, clearer billing descriptors, easier refund process.

📝 Sample Responses

Copy and customize these representment letter templates.

Fraud Chargeback Response
RE: Chargeback Case #[CASE NUMBER] - Transaction $[AMOUNT] - [DATE] We dispute this chargeback and provide compelling evidence that the cardholder authorized this transaction: 1. VERIFICATION: The transaction passed AVS verification (billing address match) and CVV verification. 2. AUTHENTICATION: The order was placed from IP address [IP] located in [CITY/STATE], consistent with the cardholder's billing address. 3. PRIOR HISTORY: This cardholder has made [X] previous purchases with us using the same card without dispute (see attached order history). 4. CUSTOMER COMMUNICATIONS: The cardholder emailed us on [DATE] asking about their order (see attached), confirming they initiated this purchase. 5. DELIVERY: The order was delivered to the billing address on [DATE] (tracking #[NUMBER] attached). This evidence demonstrates the legitimate cardholder made this purchase. We request the chargeback be reversed.
Item Not Received Response
RE: Chargeback Case #[CASE NUMBER] - "Item Not Received" - $[AMOUNT] We dispute this chargeback and provide proof of delivery: 1. ORDER CONFIRMATION: Order #[ORDER NUMBER] placed on [DATE] (attached). 2. SHIPPING CONFIRMATION: Item shipped via [CARRIER] on [DATE], tracking #[NUMBER]. 3. DELIVERY CONFIRMATION: [CARRIER] tracking shows delivered to [ADDRESS] on [DATE] at [TIME]. [If signature: "Signed for by [NAME]."] 4. ADDRESS VERIFICATION: The delivery address matches the billing address provided by the cardholder at checkout. The tracking confirmation from [CARRIER] conclusively proves delivery. We request reversal of this chargeback. Attached: Order confirmation, shipping receipt, carrier tracking printout showing delivery.
Not As Described Response
RE: Chargeback Case #[CASE NUMBER] - "Product Not as Described" - $[AMOUNT] We dispute this chargeback. The product delivered matches its description: 1. LISTING: Attached is the product listing as displayed at time of purchase, showing [product name, specifications, photos]. 2. ORDER CONFIRMATION: Customer ordered "[EXACT PRODUCT NAME]" as shown on attached order confirmation. 3. PRODUCT DELIVERED: We shipped the exact item ordered. [Describe item including any key specifications mentioned in listing]. 4. NO PRIOR COMPLAINT: The customer did not contact us about any product issue before filing this chargeback. Our return policy provides [X] days for returns. 5. [If applicable: "CUSTOMER COMMUNICATION: On [DATE], customer emailed stating they received the order without complaint (attached)."] The product delivered matches its description. If the customer was dissatisfied, they could have returned the item per our policy rather than filing a chargeback.
Canceled Subscription Response
RE: Chargeback Case #[CASE NUMBER] - "Recurring Charge After Cancellation" - $[AMOUNT] We dispute this chargeback. The charge was valid under our subscription terms: 1. SUBSCRIPTION ENROLLMENT: Customer enrolled in [SUBSCRIPTION NAME] on [DATE], agreeing to [monthly/annual] billing of $[AMOUNT] (enrollment confirmation attached). 2. TERMS OF SERVICE: At enrollment, customer agreed to our terms (attached) which state: "[Quote cancellation policy, e.g., "Subscriptions may be canceled at any time, with cancellation effective at the end of the current billing period."]" 3. NO CANCELLATION REQUEST: Our records show no cancellation request received from this customer prior to the disputed charge. [Describe how customers cancel and that no such request was received]. 4. CHARGE DATE: The disputed charge of $[AMOUNT] on [DATE] was the customer's [Nth] regular subscription payment. The customer agreed to recurring billing and did not cancel before this charge. We request reversal of this chargeback.

🚀 Next Steps

What to do after receiving a chargeback notification.

Step 1: Check Deadline

You typically have 7-14 days. Mark your calendar immediately.

Step 2: Gather Evidence

Pull transaction data, shipping tracking, customer communications, product listings.

Step 3: Assess Win Probability

Based on reason code and your evidence, decide whether to fight.

Step 4: Submit Representment

Submit through your payment processor's chargeback portal with all evidence.

Preventing Future Chargebacks

  • Clear billing descriptor - Use business name customers will recognize
  • Fraud tools - AVS, CVV, 3D Secure, device fingerprinting
  • Tracking confirmation - Always ship with tracking to billing address
  • Easy refunds - Make refunds easier than chargebacks
  • Clear product descriptions - Accurate photos and specifications

Get Professional Help

For high-value chargebacks or complex disputes, get professional assistance with evidence compilation and representment.

Schedule Consultation - $450

Resources

  • Visa Dispute Resolution: Visa Core Rules and Visa Product and Service Rules
  • Mastercard Chargebacks: Mastercard Chargeback Guide
  • Fair Credit Billing Act: 15 U.S.C. 1666