If you’ve ever heard the word "chargeback" and felt confused, don’t worry, you’re not alone.
Chargebacks are part of the payment world and can happen to any business that accepts card transactions. Let’s break it down in a simple way so you know what to expect and how to handle them.
What is a chargeback?
A chargeback happens when a customer asks their bank to reverse a transaction made with their card. Instead of, or directly after, contacting the merchant for a refund.
Chargebacks can occur for different reasons, such as:
The customer didn’t recognize the transaction on their statement
The product or service was never delivered
The product was damaged or not as described
The customer was a victim of fraud (their card was stolen)
The customer didn’t recognize the transaction on their statement
The sales credit was not processed properly
This means the money from that sale is pulled back from your account temporarily while the case is investigated. If the bank decides in favor of the customer, the amount is permanently taken from your account.
JIM is not involved in the chargeback decision process. Chargebacks are handled directly between the customer and their bank. The customer’s bank is fully responsible for reviewing the case and making the final decision. Our role is only to inform you of the result once their bank has completed its analysis.
You can either accept the chargeback or fight it by providing evidence (like receipts, delivery proof, or communication with the customer). If you believe it's unfair, you can submit an appeal. Learn more.
How does the chargeback process work?
Here’s a step-by-step view of how it usually happens:
Customer files a dispute
The customer calls their bank and says there's something wrong with the charge or claims a problem with the purchase (like not receiving the product).Bank reviews the claim
The customer’s bank looks at the case.Bank contacts the payment processor
The bank informs the payment network (like Visa or Mastercard), which then alerts your payment provider.Merchant is notified
You receive a notification that a chargeback has been filed. At this point, the disputed amount is usually deducted from your balance.Merchant response
You can either accept the chargeback or fight it by providing evidence (like receipts, delivery proof, or communication with the customer). If you believe it's unfair, you can submit an appeal. Just send the following information to [email protected]:
A detailed summary of your communication with the customer
Invoices or documents related to the sale
Signed estimates or contracts, if available
Proof of delivery or receipt
Evidence that the product or service met the terms of the sale
Your return or cancellation policies
A statement confirming the product wasn't returned
Please note that the more documents you send, the better are your chances of having your appeal approved.
Final decision
The bank reviews all the evidence and decides whether the money should go back to you or stay with the customer.
What can you do about it?
While chargebacks can’t be avoided completely, you can reduce the chances by:
Always providing clear receipts and order confirmations
Keeping records of deliveries and communications
Offering good customer support so buyers contact you before going to the bank
Being transparent about prices, return policies, and product details
Nobody likes dealing with chargebacks. They take time, energy, and money away from your business. The good news is that many chargebacks can be avoided with a few simple practices.
Be clear about your product or service
Make sure your product descriptions, prices, and delivery times are always clear. When customers know exactly what they’re getting, they’re less likely to file a dispute.
Provide detailed receipts
Send customers a receipt or confirmation email after every purchase. This not only reassures them but also serves as proof in case of disputes.
Keep proof of delivery
Always keep delivery confirmations or tracking numbers. If a customer claims they never received their order, you’ll have evidence to prove otherwise.
Offer responsive support
A frustrated customer is more likely to call their bank. Quick and friendly customer support can resolve problems before they turn into chargebacks.
Chargebacks are a normal part of running a business that accepts cards. They can be frustrating, but with clear processes, good communication, and proper record-keeping, you can minimize their impact.
Need more help?
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Our team is available Monday to Friday, 9am–5pm EST.
📧 Email us anytime at [email protected] and our support team will respond with personalized assistance.
📞 Prefer to call? Reach JIM’s phone support at +1 833 315 2573.
Available Monday to Friday, 9am–5pm EST.