A chargeback occurs when a customer disputes a charge with their bank rather than seeking a refund directly from you. Left uncontested, chargebacks result in lost revenue plus a fee. This guide explains how to fight them effectively.
Step-by-Step Instructions
- You will receive a chargeback notification via email or in your processor's dashboard. Note the response deadline — typically 7–20 days depending on the card network.
- Log into your processor's chargeback portal to view the dispute details, including the reason code.
- Gather evidence relevant to the dispute reason: for 'Item Not Received' provide shipping/delivery confirmation; for 'Unauthorized Transaction' provide signed receipts; for 'Item Not as Described' provide product specifications.
- Submit your evidence package before the deadline. Include: original signed receipt, itemized invoice, delivery confirmation, customer communications, and your refund policy.
- After submission, the card network reviews both sides. You will be notified of the outcome within 30–60 days.
- If you win: funds are returned to your account. If you lose: the chargeback stands and an additional fee (typically $15–$25) is assessed.
- Track your chargeback rate. If it exceeds 1%, proactively improve processes to avoid card network penalties.
📌 Important Note: Always respond to chargebacks — even ones you expect to lose. A consistent response record improves your standing with your processor and card networks over time.
Frequently Asked Questions
Each card network uses numeric codes to categorize the basis for a dispute. The reason code determines what evidence you need to submit to contest it successfully.
Yes. Use clear business name descriptors on statements, provide detailed receipts, use AVS and CVV verification for card-not-present transactions, and address customer complaints before they escalate.
Exceeding 1% chargeback ratio triggers card network monitoring programs. Above 2%, accounts face potential termination. Your processor may act even at lower thresholds.
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