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How merchants should fight chargebacks

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Last editedMar 20222 min read

A chargeback is triggered whenever a customer disputes a purchase made with their debit or credit card. For most merchants, chargebacks are a common blight and one of the risks of doing business that are tough to avoid. However, if a chargeback seems illegitimate it should always be fought when possible.

Can a merchant dispute a chargeback?

The good news for any merchants unsure of the chargeback dispute process is that it’s always legal for a merchant to dispute a chargeback if it feels unfounded. This is particularly true if they suspect the chargeback to be a fraudulent claim.

The bad news, however, is that the chargeback dispute process rarely favours the merchant. It was designed, after all, to help customers reclaim funds after either receiving incorrect/damaged goods or not receiving their goods at all.

As a result, banks and card companies require little proof from customers to validate a claim but a great deal of proof from merchants to fight against it. But don’t let the fact that the odds are not in your favour put you off if you think you have a legitimate dispute case.

How to win a chargeback dispute

There are several ways a merchant can give themselves the best chance to win a chargeback dispute.

Collect details upfront

All merchants should prepare themselves by collecting as much customer transaction data as possible. This includes proof of purchase, delivery confirmation, copies of the refund policy signed by the customer and any customer correspondence. The more information you have available, the faster you will be able to act and the more legitimacy your dispute will hold.

Acknowledge the timeframe

Typically, a chargeback dispute will take around four months, although it will depend on your bank. The process starts with the acquiring bank notifying the merchant that a charge has been disputed. The merchant will then be given a deadline to dispute that chargeback, which is often between 10 and 30 days. So, if you feel you have a case for a dispute, don’t delay.

Gather evidence

Gathering evidence should not be difficult as long as you collected as many details as possible on the customer and the transaction. It could be as simple as going into your payment records and pulling out the relevant details. This information should contain all the evidence you need, although it will need to directly address the chargeback reason code. The reason code classifies the type of chargeback, the reason for the dispute and the elements necessary for the merchant to dispute the chargeback claim. For example, if the customer claims they never received an item, evidence of delivery should be used as evidence.


Finally, merchants need to submit all evidence by the deadline set by the acquirer bank. If they miss this deadline the dispute will be lost by default. Not only will you lose the dispute but also the chargeback fees that must be paid by the merchant to cover the process. The evidence should be submitted alongside a chargeback rebuttal level that explains the presented evidence and why the chargeback is unwarranted.

While chargebacks can always be disputed, however, the best course of action is to always ensure they don’t happen in the first place. This can be achieved by being transparent and open with your customers and by using secure and reliable online payment solutions.

We can help

If you’re interested in finding out more about chargeback disputes, or any other aspect of your finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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