A chargeback notice can feel like an accusation. It isn't a verdict. It means a customer disputed a charge, and you now have a process to follow. What you do on the first day can make the rest of it easier.
What is a chargeback?
A customer can dispute a card charge with the bank that issued their card. Reasons can include a charge they don't recognize, a charge they say they didn't authorize, or something they say wasn't delivered as agreed. If the dispute moves forward, the disputed amount is taken back from you while it's reviewed, and you get a chance to respond with your side.
Your provider sends you the notice and handles the response process for your account. Their instructions are the ones to follow.
What should you do in the first 24 hours?
- Find the deadline. Read the notice for the response deadline, the amount, the sale date and the reason given. If you can't find a deadline, call your provider and ask. Deadlines can be short.
- Find the sale. Pull the receipt or invoice, the terminal or online record, and anything the customer signed.
- Gather proof. Collect what shows the customer got what they paid for: a signed work order, delivery or pickup records, photos, emails or texts.
- Check for a refund. If you already refunded the sale, tell your provider and send the refund record.
- Respond the way your provider asks. Use their portal or form, include what they ask for, and submit before the deadline.
- Keep copies. Save everything you send, with the date.
Responding on time doesn't mean the dispute will be decided in your favor. Missing the deadline can mean losing the chance to respond at all.
Should you contact the customer?
If it looks like a simple mix-up, like a customer who didn't recognize your business name on their card statement, a polite call or email may clear it up. Stay calm, don't argue, and don't pressure anyone to drop a dispute. If the notice says the charge wasn't authorized, leave it to your provider instead of contacting the cardholder. Before you offer a refund on a disputed sale, ask your provider how to handle it. Either way, keep following your provider's process until they tell you the dispute is closed.
What should you ask your provider?
- What's my deadline to respond, and how do I submit?
- Which documents do you need for this dispute reason?
- Is there a fee for each chargeback, and where does it show on my statement?
- How will you tell me about future disputes, and who do I call with questions?
Chargeback fees are one of the fees worth getting in writing before you sign, as our Before You Sign guide explains. To find them on a statement, see our guide to reading your processing statement.
How can you head off the next one?
- Give clear receipts that show what was sold.
- Ask your provider how your business name shows up on customers' card statements, and make sure it's a name they'll recognize.
- Post your refund policy where customers see it at checkout.
- Handle refund requests quickly, before a customer goes to their bank.
For another line that can show up on your statement, see what a PCI non-compliance fee is.
Frequently asked questions
What is a chargeback?
A chargeback happens when a customer disputes a card charge with the bank that issued their card. The disputed amount is taken back from you while the dispute is reviewed, and you get a chance to respond.
How long do I have to respond to a chargeback?
Check the notice from your provider for the response deadline, and call them if you can't find it. Deadlines can be short, so start gathering proof the day the notice arrives.
What proof should I gather for a chargeback?
Gather the receipt or invoice, the terminal or online record, anything the customer signed, and proof they got what they paid for, like a signed work order, delivery records, photos or messages. Ask your provider what they need.
Does responding mean the dispute goes my way?
Not necessarily. Responding on time doesn't mean the dispute will be decided in your favor, but missing the deadline can mean losing the chance to respond at all.
Can you prevent chargebacks?
Not every one. Clear receipts, a business name customers recognize on their card statement, a visible refund policy and quick refunds can help head off disputes that start as confusion.
How we approach it at Keepwell
When we review a statement, we point out any chargeback-related fees and explain what each one is for. A review may show other fees worth a second look. Results vary.
Want us to look at your statement? Upload it at keepwellpayments.com/upload for a free, no-obligation review.
Sources
- Federal Trade Commission, "Using Credit Cards and Disputing Charges" (how credit card holders dispute billing errors): consumer.ftc.gov/articles/using-credit-cards-and-disputing-charges (opens in a new tab)
Keepwell Payments, LLC is an independent payments agency, not a bank or payment processor. Each merchant account is set up with a payment processor we partner with and its sponsor bank, named in writing before you sign. Merchant accounts are subject to approval. Results vary by business. This article is general information, not financial, legal or security advice.