A chargeback happens when a cardholder disputes a charge with their bank and the bank takes the money back from you. On top of losing the sale, you usually pay a chargeback fee, and too many chargebacks can put your merchant account at risk.
Why customers file chargebacks
- They don't recognize the charge on their statement.
- The order didn't arrive or wasn't as described.
- They were billed after cancelling a subscription.
- Genuine fraud — a stolen card.
- "Friendly fraud" — they made the purchase but dispute it anyway.
9 ways to prevent chargebacks
- Use a clear billing descriptor that matches your business name.
- Publish an easy refund policy and honor it quickly.
- Answer customers fast — a quick refund beats a dispute.
- Send receipts and shipping confirmations with tracking.
- Make cancellation easy for subscriptions and send renewal reminders.
- Use AVS and CVV checks for online and phone orders.
- Get signatures or delivery confirmation on high-value orders.
- Keep records — invoices, emails and delivery proof.
- Add chargeback alerts so you can refund disputes before they become chargebacks.
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