A chargeback is a transaction reversal initiated by the cardholder through their bank rather than by you. You lose the sale, usually pay a fee, and the dispute counts toward a ratio that can affect your ability to accept card payments. It is materially worse than a refund for the same amount, which is why an easy refund route is a commercial decision rather than a soft one.
In more detail
The important asymmetry is that a refund is a transaction you control and a chargeback is one imposed on you. The same customer, unhappy about the same thing, costs you substantially less if they can reach you than if they reach their bank first.
That makes chargebacks partly a support-accessibility problem. A significant share of them are not fraud but frustration: somebody who could not find how to contact you, or did and heard nothing.
Evidence is perishable in practice. Delivery confirmation, the risk indicators at the time of the order and the conversation history are all easy to gather now and progressively harder as the deadline approaches.
Where people get it wrong
- Making refunds hard to obtain, which converts refunds into chargebacks at a higher cost.
- Missing the response deadline, which loses the case without anybody deciding to concede.
- Contesting everything regardless of value, where the time costs more than the amount.
- Not looking for patterns. Repeated disputes on one product are a description problem, not a series of unrelated events.
Common questions
What is the difference between a chargeback and a refund?
A refund is initiated by you. A chargeback is initiated by the customer's bank and usually carries a fee and counts toward a dispute ratio, so it costs more for the same amount.
How long do I have to respond?
The window is set by the payment provider and card scheme rather than by you. Check the specific deadline in the dispute notice and set a reminder at the halfway point rather than near the end.
How do I reduce chargebacks?
Make refunds and contact easy, describe products and delivery times accurately, and use a clear billing descriptor. A meaningful share of disputes are frustration rather than fraud.