How a chargeback moves, from the customer's bank to your account
A customer calls their card's bank and disputes a charge. The bank files a dispute through the card network. Your processor's bank receives it, takes the money back from your account, and sends you a notice. The program guide we read is direct about it: "we will debit your settlement account or settlement funds for the amount of each chargeback" [5].
| Stage | Who acts | Time limit |
|---|---|---|
| Dispute | Customer's bank | Generally 120 calendar days from the sale's processing date [1] |
| Dispute response | Your processor's bank, using your evidence | 30 calendar days from the dispute processing date [1] |
| Pre-arbitration | Customer's bank, if it rejects your response | 30 calendar days from the response [1] |
| Arbitration | Visa decides | Network fees apply whether you win or lose [5] |
Your processor will give you a shorter deadline than 30 days, because it needs time to file for you. Answer by the date in your notice, not the network's date. The program guide we read warns that if you miss it, "you will forfeit your reversal rights" [5].
Visa's time limits, by reason
The 120-day window is the most common, but the starting point changes with the reason for the dispute. Here is how Visa's rules count it for two of the most common reasons [1].
| Reason | Customer's bank must file within | Notes |
|---|---|---|
| Fraud, card not present (condition 10.4) | 120 calendar days from the processing date [1] | Online, phone and mail orders where the cardholder says they did not authorize it |
| Goods or services not received (condition 13.1) | 120 days from processing, or 120 days from the last date the customer expected delivery [1] | The bank generally waits 15 days from the expected date before filing [1] |
The "expected date" rule matters for businesses that take payment early: event deposits, custom orders, prepaid services. If you promise delivery in three months, the customer's 120 days can start after that date, so a dispute can arrive long after the sale.
What chargebacks cost: the fee, the sale, and the extras
A chargeback costs you in up to four ways: the sale amount, the processor's fee, the goods or time you already gave, and, if disputes pile up, extra fees and monitoring. The comparison table at the top shows the first two for a $120 sale.
- Stripe charges a $15 dispute received fee on each dispute and a $15 dispute countered fee when you respond manually; you get the countered fee back only if you win [3].
- Stripe also offers Smart Disputes, which prepares the evidence for you, at 30% of the disputed amount for each dispute you win and nothing extra if you lose [3].
- Helcim charges $0 for disputes resolved in your favor and $15 if you lose [4].
- Arbitration: if a case reaches Visa or Mastercard, the program guide we read says you pay the network's filing and review fees "whether or not a decision is made in your favor" [5].
Put a year on it. Ten disputes a month at a $120 average, all lost at Stripe after contesting, cost $1,500 a month: $1,200 in sales and $300 in fees, or $18,000 a year. Win half and the cost falls to $900 a month. That is why the evidence you keep matters as much as the fee you pay.
How many chargebacks is too many?
Visa watches dispute and fraud levels through its Visa Acquirer Monitoring Program (VAMP). The core measure is a count: fraud reports plus disputes, divided by settled card-not-present transactions [2]. In the U.S., the excessive merchant threshold was lowered to 150 basis points (1.5%) on April 1, 2026, and it applies to merchants with at least 1,500 fraud reports and disputes in a month [2]. Merchants over the line must put risk controls in place.
Most small businesses never come near 1,500 a month. Your processor's own limit is the one to watch. The program guide we read says that if your chargeback percentage beats the estimated industry rate, you pay "an excessive Chargeback fee for all Chargebacks occurring in such month" on top of the normal fees, measured by count or by dollars, whichever is larger [5]. The same guide makes you responsible for network fines tied to your chargebacks [5].
How to win more chargebacks, and prevent the next one
- Read the reason code on the notice. Your evidence has to answer that reason, not the story you wish the customer had told.
- Send what proves the sale: a signed or chip receipt, delivery tracking with address, emails or texts with the customer, your posted refund policy, and photos of the work.
- Write a short, plain rebuttal letter. The program guide we read recommends one "along with all pertinent documents" [5].
- Do not refund the customer separately once a chargeback is filed. The guide says you "must not process a credit transaction once a chargeback is received", because you can end up paying twice [5].
- Answer before your processor's deadline, every time. A late answer is a lost case [5].
Prevention is cheaper than winning. Use a billing name customers recognize. Dip or tap cards in person. Confirm delivery for anything shipped. Make refunds easy before a customer goes to the bank. Stripe includes dispute prevention tools from Verifi (Visa) and Ethoca (Mastercard) with its pricing [3]; ask any processor what alerts it offers.
Count chargeback costs when you compare processors
Dispute fees range from $0 on a win to $15 or more each time, and some agreements add handling or excessive-chargeback fees on top. If you get even a few disputes a month, that is worth adding to the comparison along with the rate.
BatchOut, our own processing service, includes dispute fees when it reviews a statement, so you see the full cost of taking cards, not just the rate. If you are thinking of leaving your processor, read how to switch processors first: chargebacks on old sales can still arrive after you go.