Respond to a chargeback

A customer can dispute a charge for any reason, but their bank needs to approve it before it becomes a chargeback. The clearer your return and cancelation policies are, the less likely it is that banks will approve chargebacks for your sales. 

• Have the customer sign your cancelation or return policy as part of the sale. 
• Keep good records of sales and shipments, and let your customer know what to expect.
• How you inform your customer depends on whether your business is an online business or an in-person retail business.
  • A retail merchant must have the policy printed on the sales draft below the signature line. It needs to be at least 1/4 inch in size. 

An online store must put their rules on their website and have the cardholder agree to the rules during the checkout process.
Important: If a customer has to leave the checkout experience and open the terms and conditions in a separate page, banks won't accept it as a proper disclosure.

If you haven't missed the initial retrieval request deadline, you can contest the charge. This is called a rebuttal. You’ll until the date provided in the email to send a rebuttal. 

If you want to rebut the chargeback, send the bank an explanation with PDF scans of documents that support your case. Useful examples include:

• Proof of sale, such as receipts for each transaction.
• Proof of the delivery of the product or service in good condition, such as copies of signed receipts, emails, or pictures
• Proof that the cardholder didn't return the product or service.
• Proof of any ongoing negotiations between you and the customer, like emails.
• If you already issued a refund before the chargeback was posted, send proof of the refund issued to the same card that was originally charged. For example, the front and back of a cashed refund check.
• A third-party opinion, in writing, to show that the product or services weren’t defective.

Note: Financial institutions set page limits for your response.

• Mastercard’s limit is 18 pages.  
• Visa’s limit 10 MB or 10 pages with images not to exceed 8.5” by 14”
• Discover’s limit is 14 MB. 
• American Express’ limit is 200 pages.

Once we get your documents, we’ll check that they meet the requirements of your customer’s bank. This can take up to 5 business days. If everything is in order, we’ll send it to your customer’s bank.

Before or during the rebuttal, you can try to fix your customer’s issues directly to support your case with their bank. If so, keep records of each interaction. If they feel they’ve resolved the situation:

1. Ask them to write you a letter stating that, and include it with your other documents. 
2. Ask them to contact their financial institution and cancel the chargeback.
3. Request a copy of the letter of retraction their bank provides. It should be on the bank’s letterhead and state the dispute has been dropped or resolved in the merchant’s favor. 
4. Contact our support team. They’ll help you add the letter to your supporting documentation.

There are some cases when you can't challenge a chargeback. These are called no recourse cases. Here are some common causes:

Sometimes you can’t rebut a chargeback. These “no recourse” cases include:

• When you charge a customer after the customer cancels a service or asks you to stop billing them.
• When you force a charge through after the customer’s card is declined.
• When you sell a customer an item they didn’t get. This includes items that were returned to you, refused on delivery by the customer, or lost in shipping.
• When the customer gets defective items or items that weren't as described at sale.
• When a sale is improperly authorized or unauthorized, including sales to the wrong person or to the wrong place. (This includes if the ship-to address is different from the bill-to address.)
• When a customer splits a transaction into smaller amounts paid by more than one credit card.
• When money is wired to pay for shipping costs.
• When charges are made without proof of proper disclosure, such as if the cardholder didn’t sign or initial your return or cancelation policy. 

A retail merchant must have the policy printed on the sales draft below the signature line and be at least 1/4 inch in size. An online store must put their rules on their website and have the cardholder agree to the rules during the checkout process.

Important: A link to the terms and conditions that takes the cardholder away from the sequence of website pages to checkout isn't considered a proper disclosure.

If the customer convinces the bank to issue a chargeback, an authorization code may not be enough. These codes just prove that the card was in good standing with enough money for the sale, and wasn’t lost or compromised when it was made. 

For some transactions, especially smaller ones, the system may have only checked the first six digits of a card (which identifies the bank) to let the sale to go through.