Chargeback ProcessingCrucial Processes, Time Frames & Fees to Know

December 14, 2023 | 11 min read

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Chargeback Processing

In a Nutshell

The chargeback process is a way for customers to make things right when a transaction doesn't live up to their expectations or if something goes awry. But, how do merchants process chargebacks? What are the time frames and necessary documentation? And, what can merchants do to optimize processes and reduce risk? Read on for the answers to these and other questions.

Chargeback Processing Time Frames, Fees & Documents: The Merchant’s Guide

Chargeback processing is a complex topic. As a merchant, how do you stay up-to-date on industry standards and time frames? What about the fees and all the necessary documents to process a dispute? 

Not to worry: we’ve got the answers.

In this post, we’ll give you a quick rundown of what you need to know about chargeback processing from a merchant standpoint. We’ll offer a little insight into how banks handle chargebacks and explore how you can streamline some of your operations to reduce costs and recover revenue.

How Does Chargeback Processing Work?

The chargeback life cycle generally begins when the cardholder files a complaint about a transaction. We say “generally,” because an issuer may also submit a bank chargeback if they detect an internal transaction problem, such as an authorization error. However, this doesn’t happen very often. 

Chargeback processing typically involves the following steps:

Dispute Stage

Step #1 | Customer Dispute Initiation

The process begins when a customer contacts their bank to dispute a transaction. This dispute can be for various reasons, such as not recognizing the charge, not receiving the product or service, receiving a defective product, or being charged incorrectly.

Step #2 | Dispute Review by the Bank

Once the dispute is filed, the bank reviews the claim. This involves checking the transaction details, customer account history, and other relevant information.

Step #3 | Request Information From Cardholder

The bank may request additional information from the customer to support their claim. This could include receipts, proof of communication with the merchant, or other evidence.

Step #4 | Request Information From Merchant

If the bank finds the claim to be plausible, they may reach out to the merchant about the claim. This notification includes details of the disputed transaction and a request for additional documentation.

Step #5 | Bank Makes Decision

After reviewing available evidence, the bank makes a decision. If the bank sides with the customer, the transaction amount is refunded to the customer, and a chargeback is issued against the merchant. The merchant might also be charged a fee for the chargeback.

Step #6 | Merchant Representment

If the merchant disagrees with the bank’s decision, they can opt for representment. This involves resubmitting the transaction, along with additional evidence, to prove that the transaction was valid.

Step #7 | Bank Decisioning

The bank reviews the new evidence and makes a decision. If the bank decides in the merchant’s favor, the chargeback is reversed, and the funds are returned to the merchant. If the decision still favors the customer, the chargeback stands.

In some cases, if there's still a dispute after the final decision, either party may seek arbitration from the credit card network (like Visa or Mastercard). In this case, the card network would serve as an impartial arbiter and make a final decision based on the network's rules and policies.

Throughout this process, communication and evidence are key. Both the customer and the merchant are given opportunities to present their case, and resolution of the dispute is based on the evidence provided.

Chargeback Processing Time Frames: Cardholder & Issuer

The time frames for chargeback processing vary depending on the card network. Take Visa, for example; they publish updated rulesets multiple times per year outlining current chargeback rules, timeframes, etc.

The specific circumstances of the chargeback are also a key determining factor. However, there are general time frames that both cardholders and issuers typically adhere to in the chargeback process.

Cardholder Time Frame

A cardholder typically has a limited window in which to dispute a transaction. This can range from 60 to 120 days from the date of the transaction or from when they expect to receive the goods or services. The exact time frame depends on the card issuer's policies and the reason for the chargeback.

If the issuer requests additional information or documentation from the cardholder to support their dispute, the cardholder usually has a specific time frame to respond. This can be around 30 days.

Issuer Time Frame

Once a dispute is received, the issuer is responsible for reviewing the claim and deciding whether to proceed with a chargeback. This process can take a few days to a few weeks, depending on the complexity of the dispute and the issuer's procedures.

If the issuer decides to file a chargeback, they must do so within a specific time frame set by the card network. This is typically within 30 to 45 days of the dispute being made by the cardholder.

After receiving a response from the merchant, the issuer has a set time frame to review the evidence and make a final decision on the chargeback. This period can vary but usually falls within 30 to 60 days.

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It's important to note that these time frames can vary based on the policies of the card network and the specific details of each case. Additionally, the entire chargeback process, from the initial dispute to the final resolution, can take several months. Both cardholders and issuers need to be aware of and adhere to these time frames. This helps ensure a smooth and effective chargeback process.

Chargeback Processing Time Frames: Acquirer & Merchant

Chargeback processing also involves specific time frames for merchants and acquirers (the financial institutions that process credit and debit card transactions for merchants). These time frames are fundamental for effectively managing and responding to chargebacks.

Acquirer Time Frame

Upon receiving a chargeback request from the card issuer, the acquirer has a limited time to notify the merchant. This notification period typically ranges from a few days to a week, depending on the acquirer's internal processes and the card network's rules.

If the merchant decides to contest the chargeback, the acquirer must gather and submit evidence to the card issuer within a specified time frame. This period is generally set by the card networks and can range from 10 to 30 days after the bank is notified of the chargeback.

Merchant Time Frame

Upon receiving a chargeback notification from the acquirer the merchant typically has a limited time to respond in which to contest the chargeback. This response time can vary, but is often around 10 to 20 days.

During this period, the merchant should collect and provide all relevant evidence to support their case. This can include proof of delivery, transaction records, communication with the customer, and any other relevant documentation.

Also, if the merchant chooses to represent the case (contest the chargeback), they must do so within the acquirer's specified deadline. Failure to meet this deadline can result in the chargeback being upheld without further review.


Merchants and acquirers need to be acutely aware of and adhere to these time frames to ensure their rights and positions are effectively represented in the chargeback process. Delayed responses or lack of proper documentation can significantly impact the outcome of a chargeback dispute.

Chargeback Processing Fees

Unfortunately, even if a merchant successfully fights a chargeback, they will still be responsible for chargeback processing fees.

The final amount of a chargeback fee varies, depending on the circumstances. The acquiring bank has a voice in determining the amount, as does the processor. The type of goods or services offered can also affect the price tag.

On average, a single chargeback fee is typically around $20. If the merchant is labeled as “high risk,” though, one can expect to pay much more per chargeback. Merchants at the “Excessive” tier of the Visa Dispute Monitoring Program, for example, must pay at least $50 for every dispute filed against them. That’s not accounting for any extra fees that the acquirer might tack on to cover their costs, too.

To make matters worse, chargeback processing fees are not refundable. These fees are meant to cover the costs borne by the banks. So, even if a merchant overturned a cardholder dispute through representment, the bank will keep the fee they collected to offset their expenses.

What Documentation Do I Need to Process a Chargeback Response?

Let’s say you’re a merchant, and are looking to fight a chargeback through representment. The issuing bank needs strong evidence to create a reasonable doubt about the consumer’s case. The stronger the evidence, the better the odds that the bank will reverse the chargeback.

The documents you need will vary based on the reason code attached to the chargeback. The foundation of your case is what’s called compelling evidence. This evidence is essential if you want the issuer to reconsider the initial chargeback processing. Common examples of compelling evidence include:

  • Delivery confirmation receipts
  • Tracking information
  • Signed orders or contracts
  • Sales receipts
  • Transcripts of any communications you have with the buyer
  • Photographs of the cardholder with the product

These are just a few examples. You should tailor the evidence you select to the specifics of the cardholder’s claim based on the accompanying reason code. Even if the reason code does not apply to the actual issue — which is often the case, due to the threat posed by first-party fraud — you still need to reply to the underlying claim.

You also need to include a chargeback rebuttal letter with your submission. This is a succinct summary of your case, explaining your evidence and why it invalidates the cardholder’s claim. In some instances, you may also need to include a Chargeback Adjustment Reversal Request. Check out our complete chargeback response guide for more information on these documents.

Streamlining Chargeback Management

Chargeback processing can be a confusing process. At every level, though, merchants will find opportunities to reduce costs and recover revenue.

Many potentially reversible chargebacks might go unchallenged because one couldn’t respond within the timeline imposed by the card network. In other cases, the merchant might submit a response, but still not have the chargeback overturned because they couldn’t identify the most compelling evidence. A streamlined chargeback processing approach could address both of these issues. The key is to be organized and have a process in place to quickly manage disputes.

Merchants need to be able to retrieve important documents at a moment’s notice. Building out a detailed, organized, and secure system for storing transaction information is the best thing one can do to help prepare for disputes.

Looking beyond reason codes to identify chargeback sources, plus understanding and gathering the compelling evidence necessary to fight those chargebacks, demands a strategy based on human forensic expertise and machine learning technology. At Chargebacks911®, we offer the industry’s only end-to-end chargeback management service.

Need help with the ins and outs of chargeback processing? Save time and revenue by giving Chargebacks911 a call.


How long can a chargeback process last?

The chargeback process typically takes between six to eight weeks to complete, but it can extend up to several months, depending on the complexity of the dispute and the specific policies of the card network and financial institutions involved.

What is a chargeback processing fee?

A chargeback processing fee is a charge levied by payment processors or banks on merchants to cover the administrative costs associated with handling a chargeback dispute. This fee typically ranges from $20 to $100 per chargeback and varies based on factors like the merchant's risk profile and the transaction type.

Do banks really investigate chargebacks?

Yes, banks do investigate chargebacks by reviewing the evidence provided by both the customer and the merchant to determine the validity of the disputed transaction. The depth of the investigation varies depending on the case's complexity and the issuing bank's policies.

Who pays for chargebacks?

The merchant typically bears the financial responsibility for a chargeback, as the disputed transaction amount and a chargeback processing fee are reversed from the merchant's account. If the merchant successfully contests the chargeback, these funds may be returned to their account.

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