What is Chargeback?

A chargeback is a credit or debit card charge that is forcibly reversed by an issuing bank. A chargeback can be considered a refund since it returns the funds taken from an account through a prior purchase.
Chargebacks are a part of the credit card processing system that can't be completely eliminated.

How does Chargeback Works?

When a customer is not satisfy with the purchase, and initiates a dispute by contacting the bank and asking for a refund (most chargebacks allow cardholders to file a dispute in 6 month), the bank will submit the case to the card brand (Visa, MasterCard, Discovery... etc.) and funds will be removed from the merchant's bank account and credited to the customer. A chargeback notice letter will be sent to the merchant, and a chargeback fee or administrative cost ($25-50) will be charge from the merchant.

Here's a basic rundown of how chargeback works:

Common reason when a customer can use chargeback

Customer can't recall the purchase
Customer believes the sales amount is incorrect
Customer is being double charge
Customer never receive the order or service
Customer is unsatisfied with the quality of the merchandise or the service
Customer is a victim to fraud or unauthorized charges
Customer did not present in a key-in transaction

How to Find out Chargeback?

Two ways to identify a chargeback:

Review mails sent from the credit card company.
Identify an unknown payment in the bank account. Chargeback is a real-time charge that will show up in the bank account, the merchant should contact the credit card company to determine whether it is a chargeback or not.

How to Fight Chargeback?

Review the chargeback notice letter and respond in the time range (Deadline will appear on the top right corner of the letter).
The merchant should assemble compelling evidence (copies of the sales receipt, return policy, agreement, etc), explain the situation, and fax or mail to respond the credit card company's chargeback department.
The average time of the reviewing process is 4-6 weeks.
The merchant will receive the decision letter:
※　Customer wins, and the merchant can't fight back again.
※　Merchant wins, and the customer can dispute the transaction a second time, make a pre-arbitration. (For more information about pre-arbitration, please review the articles for pre-arbitration)

How to prevent chargebacks?

There are steps businesses can take to reduce the likelihood of chargebacks and to effectively manage them when they do occur:

Secure Payment Processing: Use secure payment processing methods like EMV and chip to protect customer data and prevent fraud.
Online Order Security: Enable AVS (Address Verification System) and CVV (Card Verification Value).
Quality Products/Services: Providing high-quality products or services reduces the likelihood of customer dissatisfaction and, in turn, reduces chargebacks.
Comply with Regulations: Follow all relevant regulations and guidelines for your industry, including refund policies and customer data protection.
Documentation: Keep detailed records of customer interactions, transactions, and communications. This documentation can be crucial in case of disputes.
Identity Check: Verify the customer's ID and save the contact information for any high volume transaction.

Merchant Chargeback Service

Chargeback notice letter will provide information for re-present the chargeback and the fax number, the merchant can fax receipts and other evident to fight chargeback.


We provide dispute submission service to help our merchant file chargeback evidences.
Please contact the sales agent or merchant service if service is needed.

Updated on: 11/08/2023