The chargeback dispute process is an inevitable part of any online merchant’s work. Sometimes people want their money back, a product lacks quality, shipping goes wrong, or fraud occurs – and for a merchant, it is nothing special.
What matters is how they get their money back: a refund when a merchant initiates it, or a chargeback when the bank forcibly cancels the purchase and returns the money.
Either way, merchants lose sales, but chargebacks cost an extra fee and count against your chargeback rate, which matters a lot in parts.
The chargeback dispute process is another topic entirely: any disputed transaction is investigated, with its chargeback evidence requirements, and it ultimately determines whether the funds are returned to the customer or retained by the business.
The lifecycle of a chargeback dispute
If you fight it to the end, the chargeback dispute process has four stages: the cardholder raises a dispute, payment providers notify the merchant, the merchant accepts the chargeback or submits a response, and the issuer or network determines the outcome.
Each step has a representment timeline – a deadline for each step in the chargeback dispute process.
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Step 1 – Cardholder files a dispute
A cardholder contacts their bank to report a problem, usually an unauthorized transaction (It is not always fraud. It could be a child who bought something without asking, for example), an item that never arrived (or was damaged), or simply an overestimated budget.
While the dispute is ongoing, the bank will most likely provide provisional credit during the representment timeline. At this point, it’s unclear whether the merchant has permanently lost the funds.
Step 2 – Notification and acquirer routing
The dispute moves through the card network and acquiring bank to the merchant or its payment processor. You, a merchant, will be notified of it by receiving a reason code, a response deadline, and instructions for submitting evidence.
The disputed amount may be debited or withheld, and a chargeback fee may apply. The exact financial treatment depends on the provider and agreement.
Step 3 – Merchant decides whether to accept or fight
Within the representment timeline, a merchant must choose one of two paths:
Suppose the chargeback is valid from your point of view. For example, if the customer was charged twice or did not receive an item, you can accept the chargeback.
If the claim is false, fight it by submitting clear evidence, such as delivery records, IP logs, or signed terms, that directly answers the specific dispute reason.
Regular customers often don’t realize that filing a chargeback damages a merchant’s standing. However, asking a customer to drop an official chargeback in exchange for a direct refund will not protect your chargeback ratio. Once filed with the bank, card networks log the chargeback regardless. Issuing a manual refund on an active chargeback can also cause a double loss, as the processor may still debit the disputed amount.
To prevent chargeback ratio hits before they happen, merchants must use pre-chargeback alert services (like Ethoca or Verifi RDR) rather than post-dispute refunds.
Step 4 – Evidence review and possible escalation
The merchant submits its response through the acquirer or payment processor, which routes it to the issuer for review. In other words, to the customer’s bank.
Some cases can progress to pre-arbitration and, where applicable, card-network arbitration, such as Visa (or whichever payment network was used).
These stages involve additional rules, deadlines, and potentially significant fees, so consider escalation carefully.
Critical timelines: card scheme rules every merchant must follow
For example, let’s take Visa and Mastercard. Visa and Mastercard enforce different dispute response windows across each stage, typically ranging from 18 to 30 days depending on the network and reason code.
But they share the same view that a missed deadline is an automatic loss for a merchant, no matter how strong your evidence.
You could even say the date matters more than the argument. If you insist on disputing, you must have compelling evidence for chargeback cases.
Cardholder filing windows
Cardholders have up to 120 calendar days from the transaction date. But the absolute cap is 540 days. This is due to shipment specifics or goods made in the future. So, in this case, the client can file a chargeback from the expected delivery date.
This is why, in theory, a sale you made a year ago can still come back as a debit.
Visa representment deadlines
Under Visa chargeback time limit rules, merchants typically have 30 calendar days from the notification date to assemble and submit a representment package. Many banks set an earlier internal cut-off, so check yours the day a dispute lands.
Mastercard dispute rules
Mastercard dispute rules allow up to 45 calendar days to start a second presentment with supporting documentation. Despite this longer scheme window, merchants should submit evidence as early as possible. Logs and carrier data are the easiest to pull in the first week, and you will be in a bad spot for delaying the process. Another reason: no one really wants multiple ongoing disputes.
What merchants must provide: chargeback evidence requirements
Chargeback evidence requirements must follow the respective reason codes.
So, a response saying the customer received the goods will be automatically rejected. At a minimum, you need to contact the logistics company and request documentation showing the customer received the item and signed for the package.
Compelling evidence for chargebacks is specific. It includes dates and customers’ signed documents.
Fraud and unauthorized transactions
Proof of an Address Verification Service (AVS) match and CVV/CVC verification.
IP address logs, timestamped device fingerprints, and geolocation data.
Proof of earlier, undisputed purchases made from the same account or device.
Delivery confirmation signed by the cardholder, or proof of digital product access or download.
In lost-card or fraud cases, earlier undisputed purchases from the same device can help you win a dispute. It’s hard to believe a thief shops at the same store as a victim.
Merchandise not received or not as described
Proof of physical delivery. You will need carrier tracking logs showing delivery to the shipping address.
The item description page, order confirmation emails, and clear product terms.
Evidence that the item matches the catalog listing or the customer-approved design specifications.
Written logs showing the customer never contacted support or tried to return the item before disputing.
That last item matters more than most merchants expect. Customers usually try customer service before trying to return money via chargebacks.
Subscription & canceled recurring services
A signed recurring billing agreement or an explicit checkout consent box.
Proof that your cancellation policy was shown before checkout.
Activity logs showing the user logged in or used the service after the alleged cancellation date.
Login logs are the most compelling evidence for chargebacks of this type. A customer who says they canceled in March but used the product in April has a hard time defending it.
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Best practices to prevent and fight chargeback disputes
The best dispute is the one that never occurs – customer service is your first line of defense.
Sometimes bad things happen even if you are not aware (wrong item delivered, defective goods, etc.).
Customers often don’t distinguish between a refund and a chargeback and will likely ask their bank for help if you don’t answer their calls.
Key strategies
Keep billing statements in customers’ banking apps clear.
Send digital receipts immediately by email or messenger, and publish a transparent refund policy on your website.
Automated order tracking is user-friendly and helps clients monitor shipment status. If you don’t have one, email the customer a link with the shipment code and a link to the logistics company.
Don’t assume you have much time. It is in your best interest to resolve chargeback disputes as soon as possible.
Store four things per order: checkout consent, IP and device data, delivery proof, and support history. For fraudulent clients, that’s more than enough.
Streamline your merchant payments with Genome
Genome provides dedicated merchant accounts and payment infrastructure designed to keep your revenue flowing securely.
Instant bank payments
With Genome, you can accept instant bank payments (pay by Bank) powered by Open Banking. This direct checkout model eliminates card network fees and completely removes card chargeback risks.
Hosted payment pages
Our hosted payment page allows you to launch a secure, high-converting checkout in minutes. It simplifies PCI compliance by keeping customer payment data completely off your servers. Your clients enjoy a smooth payment flow, while your business maintains strict security standards.
Card payment processing is coming soon
Soon, full card payment processing will be available for major card networks like Visa and Mastercard. This upcoming launch will feature anti-fraud screening to keep dispute ratios under control. Adding card payment processing to your platform will allow you to manage all payment channels from a single dashboard.
Get a head start on accepting payments from Visa and Mastercard cards – apply for a merchant account inside Genome today.
