Chargebacks: what they are, and the evidence that wins them

A chargeback is a customer disputing a transaction with their bank. The bank takes the money back from you while it investigates, and you are given a window to provide evidence.

Two things make chargebacks disproportionately annoying: they arrive long after the sale, and there is usually a fee whether you win or lose.

The common reasons

"I did not make this purchase." Genuine fraud, or a family member using the card, or a customer who does not recognise your trading name on their statement.

"The goods were not as described." Usually online or phone orders.

"I was charged twice." Often a terminal retry after a timeout where the first attempt actually succeeded.

"I returned it and was not refunded." Frequently true, and a process failure on your side.

"I cancelled and was charged anyway."

The evidence that wins

A dispute is decided on records. What helps:

• The signed or PIN-verified transaction record. A contactless or chip-and-PIN transaction is strong evidence of card presence.
• The invoice, with items, date, time and amount.
• Proof of delivery for anything delivered — a name, a time, ideally a signature or photo.
• Your returns policy, as shown to the customer, ideally printed on the receipt.
• Communication with the customer — a WhatsApp exchange agreeing a resolution is genuinely useful.
• CCTV, where a card-present dispute turns on whether the person was there. Note your retention period; most systems overwrite within weeks, which is often shorter than a chargeback window.

The pattern: you cannot gather this after the fact. It has to have been recorded at the time.

Prevention at the counter

Use chip-and-PIN or contactless, never manual key entry unless there is no alternative. A keyed transaction is weak evidence and carries the risk.

Make your trading name recognisable on statements. A large share of "I did not make this purchase" disputes are customers not recognising a legal entity name that differs from the shop sign. Ask your provider what appears, and change it if it is unclear.

Print the returns policy on the receipt. Two lines.

Send digital receipts. A customer with the invoice in WhatsApp is far less likely to dispute, and far more likely to contact you first. Seedigital receipts.

Handle refunds promptly. A large share of disputes are customers who asked for a refund and gave up waiting. Refunding quickly is cheaper than defending a chargeback.

Take proof of delivery. For anything that leaves your premises.

When one arrives

1. Read the reason code. It tells you what evidence is required.
2. Find the transaction in your POS by date, amount and last four digits.
3. Gather the evidence listed above, and only what is relevant.
4. Respond inside the deadline. These are short and they are not extended.
5. Be factual. A clear timeline with documents wins; an emotional narrative does not.
6. Record the outcome, so you can see patterns.

When to just accept it

Sometimes the right decision is to accept. If the amount is small, the evidence is weak, and the time cost of defending is more than the value, accept it and move on.

What is not acceptable is a rising chargeback rate, because payment providers monitor it and a high rate can put your merchant account at risk.

The number to watch

Chargebacks as a percentage of transactions. Track it monthly. If it rises:

• Is it one product? A quality or expectation problem
• Is it one channel? Delivery or phone orders are usually where it concentrates
• Is it one staff member? Sometimes a process issue, occasionally something else
• Is it the trading name? The easiest fix on this list

What your POS should give you

• Transaction lookup by date, amount, card last four and staff member
• The invoice retrievable and printable months later
• Refund history against the original transaction
• Delivery records where applicable
• Export of the evidence pack

Seepayment reconciliation for the related discipline of catching transactions that never settled at all.