How can I dispute a credit card chargeback?

Here’s how to fight a chargeback, what to do if the card issuer doesn’t decide in your favor, and how to prevent chargebacks altogether


To fight a chargeback, you have to respond to it formally. Credit card companies each have their own rules for responding to chargebacks, so first, find out which ones apply to you. If you’re not successful, you must weigh the pros and cons before taking additional steps.

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Dear Your Business Credit,

Help! I run a small e-commerce store. A customer said a shirt she ordered wasn’t delivered and called the credit card company to get a refund. We have proof it was delivered. Can we fight this? What are my rights? – Sandy

Dear Sandy,

Merchants do have the right to fight chargebacks, and in this case, it seems like you should.

For those who aren’t familiar, a chargeback is a refund you’re forced to make when a customer disputes a purchase. The credit card company reverses the charge, which means the money gets taken out of your merchant account – the account that enables you to process credit card transactions. The customer gets a credit.

To fight a chargeback, you have to respond to it formally. Credit card companies each have their own rules for responding to chargebacks, so first, find out which ones apply to you and if there are any deadlines by which you have to respond.

Each of the three major credit card issuers has its own rules for chargebacks:

See related: Retailers are losing billions to online fraud: Could a new Amex tool help?

How to fight a chargeback

To fight a chargeback, you will generally have to fill out a form or submit a formal response letter by a specific deadline. Pay attention to the “reason code” the card issuer gives you for the chargeback, and stay focused on refuting that reason. Card networks require specific evidence to dispute each reason code.

In your response you will want to make sure you include your merchant account ID, the transaction ID, the chargeback amount and a short summary of the case. You will also want to explain why the reason – identified in the response code – is not valid.

In the case of this customer, you might say the claim is not valid because you have proof the customer received the package. She signed for it on such-and-such a date, as indicated by the scanned proof of delivery you are attaching.

Here is where keeping good records will work in your favor. Producing a proof of delivery from whatever shipping service your company used, whether it is the USPS, UPS or FedEx, can put an end quickly to customers’ claims that packages were not delivered.

Make sure to have customers sign for packages, instead of allowing the delivery service to leave them on a doorstep or porch. Otherwise, how can you prove that they actually made it into the hands of the customer?

See related: How to prevent fraud when taking card payments over the phone

What if the credit card company doesn’t decide in your favor?

In some cases, you may have to request pre-arbitration, where you can reintroduce the chargeback and disprove it again. If you and the issuing bank can’t come to an agreement, the next step is arbitration.

Do a cost-benefit analysis before you take this route, as it will require you to spend time on preparation. It may be worth it for a $3,000 purchase but not for a $15 one.

The best protection against chargebacks is a strong customer service team. Make sure to train everyone who is involved with transactions on how to spot and prevent fraud.

Also, make sure customers know how to reach you if there is a problem with a purchase – and have a strong refund policy. Some customers call credit card companies to get charges reversed because they don’t think a merchant will give them.

The more you showcase your customer-friendly policies, the less likely this is to happen.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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