A chargeback happens when a customer disputes a card transaction with their own bank, which pulls the funds back from the merchant while the claim is investigated. Common grounds include goods or services not received, not matching their description, or the transaction being unauthorised.
It is distinct from a refund. A refund is a merchant returning money voluntarily; a chargeback is imposed through the card scheme, usually carries a fee regardless of the outcome, and counts against the merchant’s dispute ratio.
Why It Matters
Chargebacks cost more than the transaction. The fee typically applies whether you win or lose, and a sustained high dispute rate can put your ability to accept cards at risk. Defending one comes down to documentation — the invoice, evidence of delivery or completion, the client’s acceptance, and the correspondence around it. This is the practical reason a tidy document chain earns its keep: the same records that make invoicing defensible are exactly what a chargeback defence requires.
Example
A client disputes a £1,200 card payment claiming work was never delivered. The merchant submits the signed scope of work, the delivery email with timestamps, and the client’s written approval of the final files. The dispute is resolved in the merchant’s favour — though the dispute fee still applies.
Frequently Asked Questions
Can I dispute a chargeback?
Yes — the process is usually called representment, and you submit evidence that the transaction was legitimate and the goods or services were delivered as agreed. Deadlines are short, so respond promptly.
How do I reduce chargebacks?
Describe what you sell accurately, use a recognisable billing descriptor, keep delivery and acceptance evidence, respond to customer complaints before they escalate, and make refunds easy — a refund is cheaper than a dispute.