When Should Merchants Dispute Chargebacks?

There is often a lot of confusion when it comes to chargebacks. The process is confusing and difficult for merchants, but they may be able to get a chargeback overturned if they feel that their rights were infringed upon. It's important to understand the time frames and deadlines that are set in place for contesting chargebacks, as well as situations when merchants should dispute chargebacks. This article will explore all the subtleties regarding chargeback disputes for merchants.

Should Merchants Dispute Chargebacks?

The answer depends on different circumstances. As a general rule, merchants should dispute chargebacks if they feel their rights have been violated in any way. For instance, a customer may have disputed a charge because they thought they were getting free shipping when you charged them shipping fees. If you can prove that the customer agreed to pay shipping fees before making the purchase, you shouldn't be punished and charged for it.

Timeframes And Deadlines For Disputing A Chargeback

To stand a chance at having a chargeback overturned if you feel that your rights have been violated, it's best to be prepared. If you are planning on disputing a chargeback, depending on different networks, a merchant typically has from 20 to 45 days after receiving the notification to submit the dispute.

When Should Merchants Dispute Chargebacks?

There are a variety of situations when merchants should dispute chargebacks. Here are some cases in which you should dispute a chargeback.

The Cardholder Forgot About A Recurring Payment

You should dispute a chargeback if a customer has forgotten about a recurring charge. The cardholder may dispute the recurring transaction because they failed or because they thought that they had been charged in the past and were outraged when they were not. 

Misunderstood The Delivery Date

Suppose a customer misunderstood the delivery date to be different from what they thought they were signing up for. In that case, you should dispute their chargeback by providing all the communications with the buyer as well as delivery terms from your site or listing.

Asked The Bank About A Transaction, Unknowingly Initiating A Dispute

It is possible for a customer mistakenly to initiate an unauthorized chargeback while asking a bank about the transaction.

Believes A Chargeback Is The Same As A Refund

Some customers believe that a chargeback is the same as a merchant's refund.

Steps To Win A Chargeback Dispute

The most effective way to resolve disputes is to use a special dispute prevention tool like Chargebackhit.com. This is an indispensable service for your business that provides multiple Card-Brand alerts and automatic resolution of disputes without merchant interaction. Another way is when a merchant can either submit a written dispute letter or an online form to the card network, typically Visa or MasterCard.

Collect Customer Transaction Details

A merchant should provide data which includes information about the customer, including name, address, phone number, and email for both the cardholder and the business. This can also include additional materials like communications, delivery information, order tracking details, etc. In addition, attach proof of the transaction from your bank records along with receipts from your business expenses.

Submit Everything To The Acquirer By The Deadline

A merchant should send the original copies of all documentation to the acquirer by the due date. The deadline should be taken very seriously and should be followed on time.

Present Clear And Detailed Chargeback Rebuttal

It's important that the merchant present their case in a clear and detailed manner which includes outlining any evidence leading to the chargeback being contested by providing receipts, screenshots, agreements, and other documents showing where the cardholder agreed to the transaction that resulted in the chargeback. In addition, any evidence of fraudulent behavior or intent must be presented, such as if there were any previous disputes with this customer or if it was noted that they were using stolen cards, etc.

Await The Final Decision

After submitting the dispute form and all relevant materials, the merchant should wait patiently for the final decision. The acquirer may choose to investigate further, or they may deny the dispute. In this case, the merchant must accept the outcome and move on. It's important to be patient because sometimes merchant disputes can take up to 45 days or even more.

The Bottom Line

As a rule of thumb, if you feel that your rights have been violated, then dispute chargebacks as soon as possible. If you wait too long, the chances are that you won't be able to contest the chargeback, and the card network will fine you. This can be very disappointing for merchants because they lose their money and increase chargeback risks for their business. The rules regarding dispute charges and when to contest them differ significantly from one network to another, so it's best to research thoroughly before disputing a chargeback in order to stand a chance of having your lost revenue returned.