Finding an unfamiliar charge on your credit card can be stressful, but disputes are often easy and simple. In fact, 96% of credit cardholders who've filed a dispute had a successful resolution the most recent time, according to the latest LendingTree survey of nearly 2,000 U.S. consumers.
After you dispute a charge, your credit card company has 30 days to confirm they received your dispute. Then, they have two billing cycles (no more than 90 days) to resolve the dispute. According to our findings, 91% of cardholders who disputed a charge had a resolution within a month.
Merchants win chargeback disputes approximately 20-30% of the time, though this success rate can vary widely based on factors such as the industry, the quality of the evidence presented, and the specific reason for the chargeback.
Merchants must adhere to the deadline given by the acquirer. If they miss it, they will lose the chargeback dispute by default. Losing the chargeback means not only losing the sales revenue, but also the associated chargeback fees merchants typically must pay to cover the cost of the chargeback process.
The acquiring bank will notify the merchant about the chargeback. This can be some time out from the initial dispute, and is usually the first the merchant hears about it. The merchant must then decide whether to accept or fight the chargeback.
Within 120 days from the last date the cardholder expects to receive the goods/services (but no more than 540 days from the transaction date). Within 120 days of the date the cardholder was informed that the goods/services would not be provided (but no more than 540 calendar days from transaction).
On average, merchants win approximately 32 out of every 100 chargebacks they decide to contest. This means that if you're a merchant dealing with 100 chargebacks, you can typically expect to successfully recover funds from around 32 of those disputes.
Key takeaways
If the credit card issuer denies the dispute, the customer can request supporting documents and can also appeal the decision or file a complaint with consumer protection agencies. If the dispute is still not resolved, customers can seek legal advice and file a case.
Merchant Win Rate Percentage. Midigator suggests that 77% of merchants win, on average, 30% of chargebacks across all industries [2]. This rate boosts to 43.82% when it comes to friendly fraud chargebacks. But sinks to 9.27% regarding true fraud chargebacks.
Disputing credit report inaccuracies doesn't affect your credit, but some changes made in response to disputes can help your credit scores. The removal of inaccurate late payments, new-credit inquiries or bankruptcies could result in credit score increases.
You should dispute a debt if you believe you don't owe it or the information and amount is incorrect. While you can submit your dispute at any time, sending it in writing within 30 days of receiving a validation notice, which can be your initial communication with the debt collector.
Companies despise them for several reasons. They not only result in lost revenue but also involve additional fees, consume valuable time, and can damage the reputation of a business. Moreover, high chargeback ratios can lead to higher processing fees or even the termination of the ability to accept credit cards.
What does the credit card company have to do? They must acknowledge receipt of your letter within 30 days. Within 90 days or two billing cycles, they must investigate your dispute.
If you successfully dispute a charge, the bank will notify the merchant and return funds to the issuing consumer via a chargeback. From here, merchants can decide if they want to dispute the chargeback or not.
Loss of revenue: Chargebacks result in a direct loss of revenue for merchants, as they have to refund the disputed amount to the customer.
The process kicks off for a merchant when they receive a notification from their payment processor or acquiring bank that a customer has disputed a transaction. This notification is the merchant's first indication that they need to gather evidence and prepare a response.
Your credit card company has 30 days to confirm it got your letter and 90 days to investigate your dispute. During this time, you may choose whether or not to pay the disputed amount.
While there isn't a guarantee to win a chargeback dispute as a seller even if you are in full rights, there are some steps that you can take to increase your chances significantly.
Dispute Chargeback
Original sales slip. Invoice. Proof of delivery of goods or services. A copy of the refund policy for nonrefundable fee.
Yes, merchants can take cardholders to court for chargebacks, particularly if they believe the chargeback was fraudulent or unjustified. To do this, the merchant would file a lawsuit in small claims court, seeking to recover the funds that were charged back, plus any additional damages or costs incurred.
The industry average for chargeback win rates is 30%.
Another source suggests that merchants win 43.82% of all friendly fraud cases [2]. However, merchants only won 9.27% of true fraud chargebacks. The former is when the actual cardholder makes a purchase using the card, but claims the transaction was fraud.
Chargeback fraud, in law, can sometimes be considered a form of payment card fraud or wire fraud. So can chargeback fraud result in jail time? Technically, yes, but usually only in extreme circumstances where it's used to steal very high values or volumes of products and services.
Settlement: Settlement times can vary from one to four business days depending on the payment network and banks involved. Funding: Funds are made available to the recipient once the receiving bank has processed the payment.