- 01Charge disputedThe cardholder asks their bank to reverse a charge.
- 02Funds pulledThe amount and a fee are taken from the merchant.
- 03Evidence windowThe merchant has a deadline to respond with proof.
- 04Bank decidesThe issuer reviews the evidence and rules.
- 05Ratio trackedCard networks track each merchant's dispute rate.
- !A dispute rate creeping up month over month
- !Disputes clustered on certain products or regions
- !Repeat disputes from the same cardholder or device
- !"Not received" disputes on orders with delivery proof
- !Fraud disputes on orders that passed every checkout check
What is a chargeback?
A chargeback is a payment reversal ordered by the card issuer after a cardholder disputes a charge. It was designed to protect cardholders from fraud and merchant errors, and it’s often used that way. It’s also used to get refunds on legitimate purchases.
When a chargeback is filed, the money is taken from the merchant straight away. The merchant can respond with evidence before a deadline, and the issuer decides who wins.
Common reasons
Fraud: the cardholder says they didn’t make the purchase.
Not received: the cardholder says the item never arrived.
Not as described: the item was different or defective.
Credit not processed: a refund was promised but not received.
What it costs
The disputed amount, a chargeback fee, and the time to respond. A high dispute rate can also put a merchant into card network monitoring programs, such as Visa’s Acquirer Monitoring Program or Mastercard’s Excessive Chargeback Program, which bring fines and can end in losing the ability to take cards.
How to prevent it
Stop fraudulent orders at checkout.
Make refunds easy, so customers don’t go to their bank first.
Respond to every dispute with order, delivery and customer history evidence.
Identify repeat disputers and limit what they can buy.
FAQ
Can a merchant win a chargeback?
Yes, with strong evidence: proof of delivery, matching customer details, account history and communication records.
What is the difference between a chargeback and a refund?
A refund is issued by the merchant. A chargeback is forced by the card issuer, and comes with fees and a mark against the merchant’s dispute rate.
How Pinch stops it
Dispute Automation →
Free lookback · for qualified brands
See what you lost last year. Free.
01
Share 12 months of data.
Install the Shopify app or SFCC cartridge, or send order, return and claim exports.
02
Get your lookback in under two weeks.
What you lost to return and claims abuse, and who took it.
03
Qualified brands try Pinch free for three months.
Run it on live orders, then decide.