Disputing a Chargeback: A Merchant's Walkthrough
A dispute lands on your merchant account. Here is what each card network says about accepting it, rejecting it, and what evidence counts.
A dispute lands on your merchant account. You have two choices: accept it and take the loss, or reject it and send your side of the story. Disputing a chargeback means choosing that second path, and this page walks through what each card network says about it.
What disputing a chargeback means
Visa says a merchant who cannot fix a dispute takes the loss. In Visa's dispute life cycle, the merchant accepts or rejects the dispute, and a rejection needs supporting documents. So rejecting is not just saying no. It is saying no with proof attached.
Visa says a merchant may settle a dispute by giving its acquirer more details about the sale. That is the whole shape of the fight. You send your acquirer documents, and the acquirer passes them to the issuer that filed the claim.
Visa says a merchant can lose the sale amount and the goods, and also pay its own costs to respond. That is the downside of fighting and losing. Visa also says accepting a dispute that cannot be fixed may save the time and cost of fighting it. Keep that in mind before you commit to a fight you cannot win.
First steps: the reason and the deadline
Start by reading the dispute reason. In a card-absent fraud dispute, the cardholder says they did not authorize or take part in an online, mail or phone sale. That reason calls for one kind of proof. A claim that goods never arrived calls for another. American Express tells merchants to review the entire claim and address the specific dispute reason with their documents.
Then find the deadline. Visa says the merchant's time to respond is the time on the acquirer's request, and it may vary by acquirer. So the number to trust is the one printed on the notice you received, not a number you remember from another dispute.
For the full mechanics of filing your response, see how to dispute a chargeback as a merchant.
How Visa's process works
Visa's rules treat some dispute types in their own way. In processing error and consumer disputes, Visa's rules say the acquirer may send a Dispute Response unless the merchant accepted through Rapid Dispute Resolution. Visa's rules also say an acquirer may send Compelling Evidence with a pre-arbitration attempt.
When Visa decides a case, it looks at process first. When deciding a case, Visa looks at whether time limits were met and documents were supplied, readable and translated. A strong argument in an unreadable document is worth nothing. Visa's rules also bar a side from giving Visa anything at arbitration that it never sent to the other side. So every document you want counted at arbitration must first go to the other side.
How Mastercard's process works
Mastercard uses the term second presentment for the merchant's response. Mastercard generally gives the acquirer 45 calendar days from the chargeback to send a second presentment.
Timing rules protect both sides. Mastercard makes the issuer wait at least eight calendar days for promised second presentment documents before filing pre-arbitration. Mastercard accepts a pre-arbitration case for the acquirer on its own after 30 calendar days from the submit date.
Mastercard also lets the acquirer second present when the chargeback was sent after its time limit. It allows the same when the issuer charged back the same transaction more than once.
Documents have their own rules. Mastercard decides whether supporting documents give enough detail for everyone to understand the dispute or rebuttal. Mastercard expects a refund to be shown in the second presentment, not in a later case filing. Mastercard ignores documents in a pre-arbitration response that the acquirer should have sent with the second presentment. If a second presentment leaves out an earlier refund, Mastercard will likely charge the acquirer the case's fines and fees.
Pre-arbitration is not the end. Mastercard lets the acquirer reject a pre-arbitration case when the merchant has a rebuttal to the issuer's new documents. Mastercard also lets an acquirer accept a pre-arbitration case, which makes it responsible for the disputed transaction.
How American Express's process works
American Express sends Inquiries as well as Chargebacks. A merchant can answer American Express disputes online and upload supporting documents from a computer. An American Express online account shows each dispute's details, deadlines and response options in one place. An American Express online account can send email alerts for new Inquiries, new Chargebacks, case updates and urgent cases.
The reply itself has rules. A reply to an Inquiry from American Express should fully address the dispute reason and every claim the Card Member made. To avoid a No reply or Insufficient reply Chargeback from American Express, a merchant should answer an Inquiry within 20 days. If a merchant does not reply to American Express in time or with the requested documents, its account is debited.
Building your evidence package
What actually counts as evidence?
Proof of delivery or pickup lets you answer a dispute where the customer says the goods never came. Photos or emails showing that the cardholder has or uses the goods can serve as evidence. Earlier payments for the same goods or service that were never disputed can serve as evidence. Evidence that the same device and card were used in an earlier sale that was not disputed can support a merchant. A merchant can answer a card-absent fraud dispute with earlier undisputed purchases that share data like device ID or IP address.
Household claims have an answer too. A merchant can offer evidence that a member of the cardholder's household or family made the purchase.
Subscriptions need their own set. For a subscription, a merchant can show a binding contract, that the cardholder uses the service, and an earlier undisputed payment.
For more on the full response process, see chargeback representment.
Compelling Evidence and Compelling Evidence 3.0
Visa defines Compelling Evidence as proof from a merchant or acquirer that the cardholder took part in or benefited from the sale. Compelling evidence is proof that the cardholder took part in the sale, received the goods or benefited from the sale.
There is a limit to what it does. Compelling evidence does not force the issuer to decide that the cardholder took part in the sale. You are making an argument, not issuing a ruling.
Compelling Evidence 3.0 is the newer path. Compelling Evidence 3.0 lets the acquirer remedy a dispute rather than send evidence the cardholder could dispute further. Compelling Evidence 3.0 only applies to card-absent sales where the cardholder says they did not authorize or take part. Compelling Evidence 3.0 is available for recurring transactions. Compelling Evidence 3.0 is not available for a first time buyer, who has no purchase history to compare. A merchant that cannot meet the remedy criteria can still use the other compelling evidence types.
For what happens after you win, see chargeback reversal.
When to accept instead of fight
Some fights cost more than they can return. Visa says accepting a dispute that cannot be fixed may save the time and cost of fighting it. If your documents do not address the reason code, or the deadline has passed, acceptance is the honest answer.
Missed deadlines have their own cost. If a merchant does not reply to American Express in time or with the requested documents, its account is debited. Mastercard ignores documents in a pre-arbitration response that belonged in the second presentment. A late or wrong document is often the same as no document.
For a fuller look at the fight itself, see how to fight chargeback.
Preventing disputes before they start
The cheapest dispute is the one that never gets filed. An unclear or confusing merchant name can make a cardholder believe a real charge is fraud. Check what name appears on your customers' statements and make it one they will recognize.
Some disputes die before birth. Disputes are rejected when a merchant sends the required data through Verifi Order Insight before the dispute starts.
Disputing a chargeback is a timed, documented task. Read the reason, find the deadline, match your proof to the claim, and send everything the first time. The networks spell out their rules.