How to Fight Chargebacks

The goal of this article is to inform you and your team on what steps you can take to cover your bases when it comes to chargebacks. Education and documentation are essential. It only takes a few operational practices to ensure you’ve got the documentation you need to fight chargebacks and win!

For starters, what exactly is a chargeback and why do they occur?

Chargebacks were first implemented to protect consumers against fraud and dishonest merchants. When a consumer files a chargeback with their bank their money is returned to their account and taken out of the merchant’s account until the merchant can provide evidence that the transaction was valid.

If the bank sides with the consumer they get their money back, and the merchant loses that money, has to pay chargeback fees, and potentially is out the goods or services from that transaction.

There are numerous reasons for consumers to file chargebacks which is why credit card companies have created different codes for each of them.  These are the most common chargeback reason codes:

Dispute of Transaction – Fraud

MasterCard 4837 – No Cardholder Authorization

Visa 83 – Fraudulent Transaction – Card Absent Environment

MasterCard 4863 – Cardholder Does not Recognize – Potential Fraud

Visa 75 – Cardholder Does not Recognize Transaction


Dispute of Goods – Non Fraud

MasterCard 4853 – Cardholder Dispute – Defective/Not as Described

Visa 30 – Services not Provided or Merchandise Not Received

MasterCard 4841 – Cancelled Recurring Transaction

Visa 41 – Cancelled Recurring Transaction

MasterCard 4860 – Credit Not Processed

Visa 85 – Credit Not Processed

MasterCard 4834 – Duplicate Processing

Visa 82 – Duplicate Processing


Why should you care?

As a business owner it is imperative that you address chargebacks. It is also imperative to be aware of your chargeback back ratio and remain below 1%.  This number can be calculated by taking the number of chargebacks you have gotten and divide it by the number of transactions that you have had during that same time period

Chargeback Ratio=  # of chargebacks in a given time#of transactions for that same time

If your ratio is above 1% your merchant account can be shut down and you will be added to the MATCH list, which ultimately makes it impossible for you to get another merchant account.

How to protect your business from chargebacks

By incorporating a few loss prevention and operational procedures into the management of your business you will be prepared to fight chargebacks. Below are some recommendations that will protect you against the most common reason codes.

Steps to take before accepting credit card transactions:

What to Collect:

Smart Merchant Time Saver Tips

Chargebacks are an inevitable part of business, but you can make the representment process a lot simpler by being prepared and educating yourself and your staff. Good luck!

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About the author

Cassi Matthews
Cassi Matthews

Cassi Matthews is a marketing manager and analyst at Chargeback.com.  Her experience in retail operations make her articles pertaining to card present and card-not-present businesses palatable, educational, and relatable to small business owners.


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