Fraud & compliance

Merchant tips: 3 Pros and 2 cons of disputing a chargeback

Getting hit with a chargeback can sometimes feel like a personal affront. This is especially true if the customer is claiming a merchant error or customer dissatisfaction.  

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It can also be frustrating to get a chargeback when you think it’s fraudulent – like someone claiming they never received their package in the mail or claiming they never authorized a purchase. 

While it might be tempting to fight every chargeback you get, it’s not always smart or fiscally responsible to do so. Sometimes, it’s best to let it go and accept the chargeback.  

Here are some pros and cons of disputing a credit card chargeback. Before you decide to dispute, go through this list to determine whether it’s worth the fight.  

Pro #1: You get the transaction amount back 

If you get a lot of chargebacks, it can start to affect your bottom line. The number-one reason why you would want to dispute a credit card chargeback is to get back the transaction amount the bank removed from your merchant account when the customer’s claim was filed. 

If the transaction amount is large and you have compelling evidence that the chargeback is illegitimate, then by all means fight it. But if it’s such a small amount that you’d end up losing more profits by fighting it, then it might be best to let it go.  

Keep in mind that you have to pay the chargeback fees and admin costs whether you fight the chargeback or not, and whether you win or lose.  

Pro #2: You send a message that you will not accept chargeback fraud 

Originally, the chargeback process was created to protect customers from credit card fraud. It gave them a means to dispute charges on their billing statement if their credit cards were stolen, so they didn’t have to pay for a fraudster’s purchases. 

The process doesn’t quite fit the world as we know it today, though. More and more people are now committing chargeback fraud to get their merchandise for free. They file a chargeback and they get their item and their money back. Some even use chargeback fraud for profit – they get their money back and sell the merchandise to make even more money. 

Fighting a chargeback often sends a message that you do not accept being a victim of chargeback fraud. If you have proof of an illegitimate claim, then you should dispute it. Hold those fraudsters accountable.  

Pro #3: You protect your reputation 

Sometimes, not disputing a chargeback is the same thing as admitting you’re guilty. And if you accept all chargebacks customers claim, the banks and card networks might start to wonder about your business. It could affect your reputation with these entities and, as a result, it could lead you to be deemed high risk, meaning you have to pay higher processing fees. Your ability to accept cards could even be revoked.  

This is a serious factor that you should consider. If you have a case, it might be a good idea to fight. 

Con #1: Resources spent 

Disputing credit card chargebacks takes time and effort. It requires resources. You need to set time aside to gather evidence, stay in contact with your acquiring bank, and write a rebuttal letter. If you’re going to dispute the claim at all, you should be willing to invest time and resources into the process to increase your chances of winning. 

But is it worth it in the end? Will you win more than you spent?  

Con #2: It could hurt customer loyalty 

Fraudsters aren’t the only ones who file chargebacks. Some of your innocent, loyal customers might file them too. In cases of friendly fraud, they might simply forget that they made the purchase. Their kid might have grabbed their credit card and make the purchase without them realizing it. The customer might not recognize your legal business name on your billing statement and thus say they didn’t authorize the charge. They might forget they signed up for recurring billing for a subscription. neighbour might have stolen their merchandise delivery.  

In these cases, you could win your case if you prove that it wasn’t credit card fraud and that the customer did in fact make the purchase. But at what cost? Forcing a good customer into battle might not be the best idea in the long term. It could ensure they never set foot in your store again.  

Is fighting worth potentially losing the customer for good? 

Before you dispute a credit card chargeback, consider these pros and cons.  


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Matt Moore

As the President and Co-Founder of BNA Smart Payment Systems, Matt is responsible for the company’s strategic direction, daily operations, and growth. Entrepreneurial by nature, he brings a wealth of sales and marketing experience earned from over 36 years in business. He has developed, implemented, and directed international sales and marketing strategies, established strategic alliances with international companies, and demonstrated leadership in the electronic payments market. Prior to BNA, Matthew served at the senior levels of major EFT/POS companies, helping them increase sales and optimize customer service. Matt is also a father of three, a fitness enthusiast who does power lifting and CrossFit, and he enjoys weekends at the cottage.

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