Chargeback
explained.

How a chargeback works

1. The cardholder disputes a charge with their bank (the issuer), for example "I never got it" or "I didn't make this purchase".
2. The issuer files it under a network reason code, such as Visa 10.4 (card-absent fraud) or Mastercard 4853 (cardholder dispute).
3. Your processor debits you. Stripe, for example, debits the disputed amount plus a dispute fee from your balance as soon as the dispute opens, and holds the funds for the whole dispute.
4. You respond or accept. Responding with evidence is called representment.
5. The issuer decides. Stripe says issuers usually take 60 to 75 days to evaluate evidence, and the full lifecycle typically runs 2 to 3 months.
6. Further stages are possible. Depending on the network and processor, a decided case can move to pre-arbitration and arbitration.

Your processor facilitates the case but does not decide it. Stripe's own documentation says the outcome is at the sole discretion of the cardholder's bank.

Time limits that matter

• Cardholder window: card networks typically allow disputes within 120 days of the payment, with longer windows in some situations (Stripe). For prepaid future services such as events or travel, the window usually starts on the service date. American Express says Card Members have up to 120 days from the transaction date, with exceptions for goods not received, returns or cancellations, and re-disputes.
• Your response window: set by your processor and usually shorter than the network's. Stripe says usually 7 to 21 days depending on the network. American Express gives 20 days. Adyen lists 9 days for Visa disputes in the US and Canada and 18 days elsewhere (as of July 21, 2025), and 40 days for Mastercard.

Always work to the deadline your processor shows, not a number from a blog post. To work out both dates for a specific order and reason code, use the chargeback time limit calculator.

A worked example

A store sells a $120 jacket. Six weeks later the cardholder tells their bank it never arrived. The processor debits $120 plus a $15 dispute fee (check your own fee schedule).

• If the merchant wins with carrier tracking showing delivery to the order's address, the $120 comes back. At Stripe the dispute received fee is not returned for businesses outside Mexico, so the win still costs $15 plus staff time.
• If the merchant loses, the cost is $135 plus the jacket, the original shipping and the payment fees.

Why chargebacks matter beyond the money

• They count against you even when you win. Stripe notes that all disputes, won or lost, count toward your dispute rate.
• Ratios trigger monitoring programs. Stripe describes dispute activity above 0.75% as the industry's "excessive" marker, and the card networks run their own monitoring programs. See chargeback ratio monitoring.
• Causes differ. Some chargebacks are true third-party fraud, some are friendly fraud by a real customer, and some are merchant errors (duplicate charges, refunds never processed). Each needs a different fix.

What merchants should do

• Prevent the preventable: a recognizable merchant descriptor, fast refunds, order screening, 3-D Secure on risky orders and acting on early fraud warnings.
• Respond to winnable disputes before the processor deadline, with evidence matched to the reason code.
• Accept the unwinnable ones quickly, such as a genuine duplicate charge, so you stop spending time on them.

Common mistakes

• Refunding after the dispute opens. Most processors block or discourage a separate refund while a dispute is open (Stripe does), and a refund issued anyway can mean paying the customer twice.
• Ignoring inquiries and pre-dispute notices. An unanswered inquiry can escalate into a chargeback that is very hard to win. See chargeback vs dispute vs inquiry.
• Sending generic evidence. A fraud claim and a "not received" claim need different proof.

How Verdikx helps

Verdikx is a fraud, chargeback and dispute platform for e-commerce and SaaS merchants, made by Verdikx LLC. Shopify Payments disputes sync automatically, Stripe disputes sync on Growth and Pro, and chargebacks from any processor or bank can come in by email forwarding or CSV on every plan. Each case gets a deadline, a playbook for its reason code and an evidence packet built from your order, delivery and customer records, with AI-drafted responses you review. On Growth and Pro, Autopilot can prepare drafts for every case and, if you opt in, submit only cases that meet limits you set, 48 hours before the deadline by default. Verdikx does not guarantee outcomes: the issuing bank decides. Plans start at $29 a month, flat, with a 7-day free trial. See chargeback management and pricing.