A chargeback notification usually arrives at the worst moment: a short email, a dollar amount already removed from your balance and a deadline measured in days. Inside the notice sits a reason code, a short number that tells you which claim the cardholder made and, more importantly, what evidence will answer it. Stores that learn to read reason codes win far more disputes than stores that send the same generic reply every time.
This guide explains what a chargeback is, how the dispute process works from start to finish, what the common reason codes mean, and which evidence answers each one. It also shows how to prepare before disputes arrive, how to keep your dispute rate low and when it makes sense to automate the response. It describes how disputes generally work on the major card networks. Your payment provider’s own documentation is the final word on its deadlines and formats.
What a chargeback is, in plain language
A chargeback is a payment reversal that the cardholder’s bank forces after the cardholder disputes a charge. Instead of asking you for a refund, the customer asks their bank to take the money back. The bank temporarily withdraws the amount from your balance, and a short process decides who keeps it.
The process exists to protect consumers from fraud and from merchants who do not deliver. It is not designed as a punishment, but it behaves like one for the store: you lose the sale, the goods if they were shipped, and usually pay a dispute fee whether you win or lose.
How the dispute process works
- The cardholder contacts their bank and says they do not recognise a charge, did not receive an order or are unhappy with it.
- The bank files a dispute with a reason code that describes the claim and takes the amount from your payment provider.
- Your provider withdraws the amount from your balance, adds a dispute fee and notifies you, with a deadline to respond.
- You submit evidence that answers the specific claim, before the deadline.
- The bank reviews your evidence and decides, which can take several weeks.
- If you win, the money returns to your balance, usually without the fee. If you lose, the amount stays with the cardholder, and in some cases a second stage called arbitration exists.
The five families of reason code
Each card network publishes its own list of codes, and the numbers differ between networks, but nearly all of them fall into five families. Learn the families and you can handle almost any code you meet.
1. Fraud: “I did not make this purchase”
The cardholder says someone else used their card. Typical codes include 10.4 on Visa for card-absent fraud and 4837 on Mastercard for no cardholder authorisation. This is the most common family for online stores. The answer is evidence that the real cardholder placed the order: matching billing and shipping details, address and security code checks, a consistent device or IP, a history of earlier undisputed orders and delivery to an address tied to the cardholder.
2. Product not received: “It never arrived”
The customer says the goods or service were not delivered, for example 13.1 on Visa or 4855 on Mastercard. The answer is carrier tracking showing delivery to the address on the order, the delivery date, a signature or photo if you have one and any messages in which the customer acknowledged the delivery.
3. Not as described or defective
The customer says the item was different from the listing or was damaged, such as 13.3 on Visa. The answer is the listing as it appeared at purchase, your published policies, photographs of the item before dispatch, support messages and any return or replacement you offered.
4. Credit not processed: “I was promised a refund”
The customer says they returned the goods or cancelled and never received the refund, for example 13.6 on Visa. The answer is proof that the refund was issued, with its date and amount, or proof that the return policy was not met, with the policy as shown at purchase.
5. Processing errors: duplicates and subscriptions
The customer says they were charged twice, charged the wrong amount or charged after cancelling, such as 12.6.1 on Visa for duplicate processing and 13.2 for a cancelled recurring payment. The answer is two separate orders with different contents, the authorised amount, or the agreement and cancellation record that shows the charge was valid.
| Reason family | What the customer claims | Evidence that answers it |
|---|---|---|
| Fraud | I did not make this purchase. | Address and security code results, device and IP, past orders, delivery to the cardholder |
| Not received | It never arrived. | Carrier tracking, delivery scan, address match, signature or photo |
| Not as described | It is not what you promised. | Listing as shown, policies, support messages, return tracking, photos |
| Credit not processed | I was promised a refund. | Refund confirmation with date and amount, or the return policy as shown |
| Duplicate | I was charged twice. | Two separate orders with different items and times |
| Subscription | I cancelled or never agreed. | Agreement, renewal notices and the cancellation record |
Friendly fraud: when the claim is not true
Some disputes come from real customers who did place the order but forgot, did not recognise the descriptor on their statement or chose to dispute instead of requesting a refund. The industry calls this friendly fraud, and it is often the largest share of fraud-coded disputes. The defence is the same as for any fraud claim: evidence that the order was genuine, and a clear billing descriptor so customers recognise the charge.
Prevention matters here. A descriptor that shows your store name, an order confirmation email sent immediately and a shipping notice with tracking all reduce the chance that a customer says “I do not know this charge”.
What evidence wins disputes
Evidence works when it answers the exact claim in the reason code and is easy for a reviewer to read. Reviewers look at hundreds of cases, so a short, ordered, factual submission beats a long one.
- Match the evidence to the code. Do not send delivery proof for a credit-not-processed claim.
- Lead with the strongest fact. Put the delivery confirmation or the refund record first.
- Use screenshots and exports, not descriptions. A tracking page screenshot is evidence. “It was delivered” is not.
- Keep a clear timeline. Order, confirmation, dispatch, delivery and every customer message, with dates.
- Attach your policies as shown at purchase. The version the customer agreed to matters, not today’s edit.
- Stay factual and short. Avoid accusations and leave out anything that does not answer the claim.
Compelling evidence for fraud claims
For some card-absent fraud disputes, networks accept a specific kind of strong evidence: proof that the same cardholder made earlier, undisputed purchases with the same device, address or account. Where your platform records this information, it is one of the most effective things to include, because it shows the person who ordered is the person who always orders.
How to prepare before a dispute arrives
The stores that win most disputes did the work long before the notice arrived. A small amount of preparation turns each dispute from a scramble into a routine.
- Use a billing descriptor that customers will recognise, and put your support address in the order confirmation.
- Save the order, payment checks, device and IP data, and every customer message against the order record.
- Always dispatch with tracking, and keep carrier confirmation of delivery.
- Publish shipping, returns and refund policies where customers see them at checkout, and keep dated copies.
- Send an order confirmation, a dispatch notice and a delivery notice, and keep copies.
- Make refunds easy to request so customers do not turn to their bank first.
- Track every dispute deadline in one place, with a reminder two days before it falls.
Keeping your dispute rate low
Card networks watch the share of your transactions that end in a dispute. When the ratio rises towards roughly one percent, many providers raise warnings, and persistent high rates can lead to extra fees, reserves or even closure of the account. Disputes are therefore a risk to the whole business, not just to the amount lost.
- Answer customers quickly. A customer who gets a fast reply rarely goes to the bank.
- Refund fast when you are in the wrong. A refund costs less than a dispute and its fee.
- Screen risky orders. Mismatched billing and shipping addresses, unusually large orders and rushed shipping to new addresses deserve a second look.
- Describe products accurately. Most not-as-described disputes start with a listing that promised too much.
- Be clear about delivery times. Late delivery creates more disputes than anything else.
Where automation helps
Responding to disputes by hand means finding the order, collecting the tracking, exporting messages, writing a summary and uploading everything before the deadline. For a store with a few disputes a month that is manageable. For a store with dozens it is a part-time job that is easy to get wrong when deadlines collide.
A dispute response system receives each notice, identifies the reason code, gathers the matching evidence from your store, carrier and support records, writes a concise statement and submits it, with a person reviewing anything unusual. Our chargeback and dispute response service is built inside your own tools and keeps a log of every case, so you can see win rates by reason and spot patterns of fraud or product problems.
A dispute evidence checklist
Keep a checklist at hand for every dispute. You can copy one from our templates page, and this is the short version.
- Order number, date, amount and customer details.
- Payment checks recorded at the time of purchase.
- Carrier, tracking number and delivery confirmation.
- Shipping and returns policy as shown at purchase.
- Every customer message about the order.
- Any refund or replacement offered, with dates.
- The response deadline, and the day you submitted.
A typical dispute timeline
| Stage | What happens | Your job |
|---|---|---|
| Inquiry or early warning | The bank or an alert service tells you a customer questioned a charge | Refund quickly if the claim is right, because it may stop the dispute |
| Dispute opened | The amount and a fee leave your balance | Note the reason code and the deadline immediately |
| Evidence submitted | You send your case through your payment provider | Match the evidence to the claim and submit before the deadline |
| Review | The cardholder’s bank decides, which can take several weeks | Wait, and do not contact the customer in an accusing way |
| Outcome | You win and the money returns, or you lose and it stays with the cardholder | Record the result, and look for patterns |
| Second stage, where available | The case can escalate for a further fee | Decide whether the amount justifies the cost |
Writing the statement that goes with your evidence
Most providers let you add a short written statement. Reviewers read many, so keep it brief, factual and in order. A simple structure works for almost every case.
- One sentence naming the order, the date and the amount.
- One sentence saying what the cardholder claimed and why the evidence answers it.
- A short list of the attached documents, strongest first.
- A plain closing line that asks for the dispute to be decided in your favour.
Special cases: digital goods, subscriptions and dropshipping
- Digital goods have no tracking number. Evidence includes download or access logs with timestamps and IP addresses, confirmation emails and account activity after purchase.
- Subscriptions generate disputes when customers forget they signed up. Send clear renewal reminders, make cancelling easy and keep the sign-up consent and every notice.
- Dropshipping adds delay between order and delivery. Set honest delivery times, track every parcel and keep the supplier’s dispatch confirmation with the order.
- Pre-orders and made-to-order items need the expected date shown clearly at checkout, because “not received” claims often start with impatience.
When not to fight
Not every dispute is worth fighting. If the evidence is weak, the order value is low compared with the effort and the fee, or the customer has a fair point, accepting the dispute and fixing the cause can be the better choice. Keep a record anyway, because patterns in the disputes you accept teach you where your process fails, such as a slow carrier or a misleading listing.
Numbers to track every month
- Dispute rate: disputes divided by transactions in the period.
- Win rate by reason: which claims you win and which you lose, so you can improve the weakest.
- Average time to respond: how long before the deadline you submit.
- Value lost and fees paid: the true cost, including time.
- Disputes by product and by carrier: patterns that point to a listing or shipping problem.
The short version
Learn the five families of reason code, match your evidence to the exact claim, prepare records before a dispute arrives and track every deadline. Stores that do this win more disputes, lose less money and keep their dispute rate healthy. When the volume makes it hard to keep up, an automated response system does the gathering and filing while a person reviews the unusual cases.