Chargebacks

A chargeback occurs when a customer files a complaint with their card-issuing bank about a transaction. The customer claims the transaction was unauthorized or there was an issue with the product or service received.

Common reasons for chargebacks include fraudulent transactions, duplicate charges, or unsatisfactory goods or services.

The chargeback amount may exceed the original payment due to currency exchange rate fluctuations.

Disputing chargebacks at the pre-arbitration or arbitration stages can lead to additional fees. Solidgate’s automated dispute representment does not cover these cases, but merchants can still handle them manually if needed.

Chargeback overview

Received dispute Webhook entity signifies the start of the dispute process, containing the chargeback type and chargeback flow. The chargeback flow outlines the various stages of the dispute process, including the first chargeback, pre-arbitration, and arbitration.

Each stage appears as a separate entity, similar to how individual transactions are displayed within an order.

 1
 2
 3
 4
 5
 6
 7
 8
 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

{
  "chargeback": {
    "id": 148812,
    "dispute_date": "2025-07-12",
    "settlement_date": "2025-07-10",
    "amount": 100,
    "currency": "USD",
    "type": "2nd_chb",
    "status": "reversed",
    "reason_group": "Fraud",
    "reason_code": 10.4,
    "reason_description": "Fraud – Card-Absent Environment"
  }, 
  "chargeback_flow": {
    "id": 12345,
    "date": "2025-07-10",
    "updated_date": "2025-07-11",
    "settlement_date": "2025-07-10",
    "deadline_date": "2025-07-12",
    "amount": 100,
    "dispute_amount": 0,
    "currency": "USD",
    "type": "2nd_chb",
    "status": "reversed",
    "arn_code": "127011XXXXXX140503"
  }
}

Types

Statuses

Chargeback statuses indicate the different stages of the chargeback process, including investigation and resolution.

Track chargebacks

Each chargeback receives a Guide
Gain a better understanding of chargeback nature and manage them effectively. reason code and a detailed description from the card network. These codes are useful for analysis and segmentation.

• For allocation chargebacks, reason codes 10/11, there is no representment stage. If challenged, a pre-arbitration is issued, and the case may go to arbitration if the issuer declines.
• For collaboration chargebacks, reason codes 12/13. After the merchant challenges, a representment is made. If declined, a pre-arbitration is issued, leading to arbitration if necessary.
• For Mastercard transactions, after challenging, the funds are returned immediately if the re-presentment is accepted. If declined, a pre-arbitration is issued, and the case may go to arbitration.

Respond to chargebacks

Dispute handling is often overwhelming and time-consuming, requiring merchants to manually collect, prepare, and submit evidence for each case. To address this, auto representment submits documentation automatically to support dispute resolution.

If you have extensive evidence or the disputed amount is significant, manual representment lets you defend disputes by submitting detailed evidence yourself, either via API or through the Hub.

Dispute response is available for chargeback disputes:

• type 1st_chb , 2nd_chb , arbitration
• status in_progress

Auto representment

Fully automated representment submits dispute evidence, reducing manual intervention. Evidence is generated using improved logic that enhances structure, formatting, and data enrichment to increase the effectiveness of dispute resolution.

The system collects comprehensive merchant information, including business details, business description, and a summary of terms and conditions. It also gathers dispute data, transaction data, anti-fraud checks, and fraud signals.

An internal framework enables fine-tuned optimizations based on factors like issuer or dispute reason code. This framework supports ongoing improvements to increase representment success rates.

Enrich evidence

While auto representment automates evidence generation and submission, some disputes require additional merchant-specific documentation such as delivery confirmations, receipts, application logs, or communication history.

Evidence enrichment allows merchants to supplement auto-generated evidence with their own files and annotations before submission.

Manual representment

Manual representment offers more control but requires careful preparation and timely submission.

Evidence requirements for the most common reason codes.

Fraud - card-absent environment

Card network	Digital product or service	Physical products
Visa 10.4 Mastercard 4837 Amex F29 Discover UA02 Diners C42 JCB 546	Description, date, and time of the products or services successfully downloaded. The evidence must also contain at least two of the following: Customer's IP address and their device's geographical location at the time of purchase Device ID and name of the device Customer name and email address linked to their customer profile Evidence that the customer logged into their account for your business before the transaction date Evidence showing that the cardholder accessed your website or app to make a purchase or use the service on or after the transaction date Evidence that the same device and card used in the disputed payment was used in a previous payment that was not disputed Description of the digital goods and the date and time they were purchased and downloaded Record of previous non-disputed payments	Evidence such as photographs or emails to prove a link between the person receiving products and the cardholder If the products are collected from a physical location, provide: Cardholder signature on the pickup form A copy of identification presented by the cardholder Details of identification presented by the cardholder The address to which a physical product was shipped, matching the billing address verified with AVS The date on which a physical product began its route to the shipping address Courier's GPS location proving the product was delivered

Consumer dispute - merchandise/service not provided

Card network	Digital product or service	Physical products
Visa 13.1 Mastercard 4853, 4855 Amex F29 Diners D62 Discover UA02 JCB 516	Description, date, and time of the products or services successfully downloaded. The evidence must also contain at least two of the following: Customer's IP address and their device's geographical location at the time of purchase Device ID and name of the device Customer name and email address linked to their customer profile Evidence that the customer logged into their account for your business before the transaction date Evidence showing that the cardholder accessed your website or app to make a purchase or use the service on or after the transaction date Evidence that the same device and card used in the disputed payment was used in a previous payment that was not disputed Description of the digital goods and the date and time they were purchased and downloaded Record of previous non-disputed payments	Proof of delivery (tracking number) Customer signature confirmation Delivery confirmation email Evidence such as photographs or emails to prove a link between the person receiving products and the cardholder If the products are collected from a physical location, provide: Cardholder signature on the pickup form A copy of identification presented by the cardholder Details of identification presented by the cardholder The address to which a physical product was shipped, matching the billing address verified with AVS The date on which a physical product began its route to the shipping address Courier's GPS location proving the product was delivered

Processing error – duplicate processing/paid by other means

Card network	Digital product or service	Physical products
Visa 12.6 Mastercard 4834 Amex P08 Discover DP Diners B25 JCB 512	The charge ID for the previous payment that appears to be a duplicate of the one that is disputed An explanation of the difference between the disputed payment and the prior one that appears to be a duplicate Documentation for the prior payment that can uniquely identify it, such as a separate receipt Copy of invoices for two separate orders	The charge ID for the previous payment that appears to be a duplicate of the one that is disputed An explanation of the difference between the disputed payment and the prior one that appears to be a duplicate Documentation for the prior payment that can uniquely identify it, such as a separate receipt Copy of invoices for two separate orders A shipping label or receipt for the disputed payment

Consumer dispute - cancelled recurring transaction

Card network	Digital product or service	Physical products
Visa 13.2 Mastercard 4841 Amex C28 Discover AP Diners D69 JCB 544	Any server or activity logs showing proof that the cardholder accessed or downloaded the purchased digital product Your subscription cancellation policy, as shown to the customer An explanation of how and when the customer was shown your cancellation policy prior to purchase A notification sent to the customer of renewal or continuation of the subscription Proof that notice of upcoming billing was sent to the cardholder 10 days before the transaction Proof that the services were used between the billing date and the cancellation date The cardholder requested a cancellation for a different date, and services were provided until that date	Your subscription cancellation policy, as shown to the customer An explanation of how and when the customer was shown your cancellation policy prior to purchase A notification sent to the customer of renewal or continuation of the subscription Proof that notice of upcoming billing was sent to the cardholder 10 days before the transaction Proof that the cardholder did not return the merchandise

Accept or challenge disputes

Once you have reviewed the dispute details, determine whether to accept or challenge the dispute. Responding through the formal dispute process is the only way to attempt recovery of the funds. Consider the following when deciding how to respond:

• Verify the validity of the claim
  Review the transaction history, customer communication, and delivery records to determine whether the cardholder's complaint is justified. If the claim appears invalid, gather evidence to disprove it.
• Attempt direct resolution with the customer
  In some cases, the cardholder may agree to withdraw their dispute if you resolve the underlying issue. For example, by issuing a replacement, providing store credit, or clarifying a misunderstanding about the charge.
• Evaluate whether the transaction qualifies for liability shift
  If the transaction was authenticated using Guide
  3D Secure (3DS) is a security protocol for online card transactions that adds an extra layer of verification, reducing fraud and shifting liability for chargebacks to the issuing bank. 3D Secure, liability may have shifted to the issuer. Consider challenging the dispute and including the authentication outcome as part of your evidence.
• Assess the cost versus the potential recovery
  Weigh the transaction amount, the strength of your evidence, and any applicable fees before proceeding. Challenging disputes at pre-arbitration or arbitration stages may incur additional costs that may exceed the disputed amount.

Response timeframes

Disputes must be addressed within strict time limits. Missing the deadline results in automatic acceptance of the chargeback.

Each issuing bank sets its own timeframes for the dispute process. When a dispute is raised and a chargeback is initiated, you are required to respond and submit supporting evidence within the specified period. It is recommended to provide your response promptly or use auto representment, which can automatically submit evidence on your behalf, ensuring timely submission while maintaining completeness and accuracy.

The table outlines the dispute defense timeframes, expressed in calendar days, for the major card networks.

When to challenge disputes

Consider challenging a dispute when one or more of the following conditions apply:

• You have compelling evidence that directly addresses the Guide
  Gain a better understanding of chargeback nature and manage them effectively. reason code, such as delivery confirmation, customer communication, or proof of service usage.
• The transaction was authenticated using 3D Secure, and liability may have shifted to the issuer.
• The transaction amount is high enough to justify the time investment and potential processing or network fees.
• The dispute reason is unjustified, for example, when the customer received the goods or successfully accessed the digital service.
• The dispute represents a first chargeback, where representment success rates tend to be higher and associated fees are lower.

When to accept disputes

Consider accepting a dispute when one or more of the following conditions apply:

• You do not have strong evidence to address the chargeback reason code.
• The transaction amount is too low to justify the effort required to gather and submit evidence.
• The cost of challenging the dispute at the pre-arbitration or arbitration stage exceeds the disputed amount.
• The transaction is confirmed to be fraudulent.
• The customer returned the merchandise or did not receive it due to a verified delivery issue.
• A refund has already been issued for the transaction.