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Everything You Need to Know About Merchant Chargeback Rights

Time to read you your rights! Even within a system that is so thoroughly pro-cardholder, and thus merchant-unfriendly by proxy, merchants do have rights when dealing with chargebacks. Like most other rights, they only offer protection to those that know them. Take the following to heart and position yourself to redeem them for maximum protection.

First, know what you’re up against. Whether you’re in a high-risk vertical or not, chargebacks can threaten your processing, drain your revenue and crush your dreams. Moreover, most chargebacks are like unforced errors. There are steps you can take to prevent and mitigate them; failure to act will make chargebacks into a bigger problem than they should be.

Merchant rights ensure that you get the tools you need to effectively manage your chargebacks. We hope that after reading this article you will know everything about your merchant dispute credit card chargeback rights, thus providing your business a stable future.


As you well know, terms and conditions are always changing; our mailboxes are stuffed with change notices from every company we’ve ever interacted with. So your rights in transaction disputes vary between credit cards, banks and processors.

Merchants can learn all about their rights by reviewing the documentation provided by Visa, MasterCard, Discover, or American Express. These major companies supply you with a lot of information and rules about credit card chargeback laws and chargeback fraud. Learning about policies and terms and conditions can be beneficial for all your future transactions.

Ensure that you are up to date with the terms every time you see something’s updated. Do that for all major card-issuing networks because you might find the terms that better suit your line of work and decide to transfer to some other financial institution. Being informed about any possible change can be essential for the progress of your business.

Still, there are some things that apply to any chargeback you will receive:

  1. You’ll be given reason codes. Each and every card association has an exhaustive list of reasons for a chargeback. Each reason has a code and you will receive that code when notified of a dispute.

  2. Merchants are protected against late delivery. Late delivery does not have a reason code. If a purchased item arrives after it was promised, the customer must take up the issue with the merchant and not the issuer.

  3. There is a mandatory waiting period. Issuers must wait 15 days after they receive a dispute before it can become a chargeback. The issuer or card scheme reviews the dispute at this time to determine if the merchant is at fault. This also affords merchants some time to approach a customer.

  4. Chargebacks only apply to the item purchased. If the item in question was delivered, cardholders can not chargeback shipping, handling, or any attendant fees charged for order fulfillment.

  5. No chargebacks are allowed for cashback. Cash-back transactions are final and can not be refunded or charged back. Could you imagine otherwise?

  6. Merchants have a right to representment. If you disagree with a transaction dispute for any reason, you can argue your case through representment. This almost invariably pertains to friendly fraud disputes.

Merchants don’t get to passively enjoy these rights, however. It’s incumbent on them to understand the terms and conditions of the card associations they process; that includes their various reason codes. A card scheme’s terms can sandbag a merchant’s rights with caveats and limitations. The more you know about these, the more prepared you’ll be.


One thing to remember is the burden of proof is on the merchant. Your right to representment is only useful if you have the evidence to back it up. You have to provide as much evidence as possible, and be sure to organize the evidence in a structured way that’s very easy to follow.

Representment is initiated with a letter of chargeback rebuttal; you will have to submit all compelling evidence as one PDF document. This is your key line of defense against fraudulent chargebacks. Organized and valid evidence will make chargeback verdict reversed in no time.

Be professional and always save every possible track of the transaction for at least six months after the purchase. Remember, that there are a lot of scammers who are also professionals at this game and they’ll file a fraudulent chargeback at the last possible moment.

Representment is a complex process that takes a lot of time, but if you want to fight for your rights (and your revenue), you need to be ready.


  • Product description and the URL (links associated with that product)

  • Customer name

  • Their IP address

  • ID of device used for transaction

  • Signatures

  • Billing address

  • Receipts (scans or screenshots)

  • Correspondence that you’ve had with the customer (e-mails, chats, audio recordings, etc.)

  • Shipping address

  • Shipping documents that you have

  • The date of delivery

  • Tracking numbers

  • Information about the carrier

  • For digital products, provide server logs, user paths, download history, etc.


Unfortunately, most ecommerce merchants have been victims of fraud. Scammers are trying to steal money in various ways, usually by doing things that are difficult to track or prevent.

One of the most common ways fraudsters scam merchants is by committing a friendly fraud or chargeback fraud. After finalizing the purchase, friendly fraudsters either claim a transaction was not authorized or that it wasn’t received. Their aim is to procure your product and get the money for it back as well.

You, as a merchant, lose the item and spend your own money on chargeback fees. Further, your processing score takes a hit as that chargeback goes into your chargeback-to-sales ratio.

There are, of course, ways to prevent these frauds. Numerous fraud prevention tools are at your disposal, you just need to test how they work and incorporate as many as possible into your business protection plan.


Chargebacks are frustrating. However, not all disputes are from a shady fraudster trying to get over on you. If you receive a complaint from a buyer about the product they purchased, that’s a good thing. Chargebacks are easy to come by so most customers just go that route. You want to keep the ones that come to you. Act fast, be patient, and get them to describe the problem as thoroughly as possible. Having a good customer support can save you from a chargeback at worst and earn a loyal customer at best.


Chargebacks were created to protect customers from fraud; the merchant’s role in the process is not more than an afterthought. However, merchants do have rights they can use to defend themselves against chargeback abuse and friendly fraud.

The most important of these rights is the right to representment. Not exercising that right properly is tantamount to giving your revenue away. Be sure to review our resources on representment to ensure you’re in an optimum position to use it successfully. At ChargebackHelp, representment is our specialty. There’s nothing we like more than helping our merchants beat bogus disputes.

If you’re unclear about your merchant rights, or curious about protecting your revenue with representment, ChargebackHelp is here to help. Drop us a chat down on the right, shoot us an email, or go old-school and call us 1.888.821.5302