Guide to Merchant Chargeback Rights

We’re just going to come out and say it: you, as a merchant, do have chargeback rights. There are too many misconceptions, myths, half-truths, and outright lies about merchant rights. Our goal with this article is to put an end to this misinformation about credit card chargeback merchant rights.
We want you to know this: you have rights and you must exercise your rights. Failure to do so only reinforces the confusion surrounding what it means to be a merchant in the 21st century. We are on your side. Your issuers are on your side. Your acquirers are on your side. Your customers are on your side.
Merchants Need to Know Their Rights
“The chargeback process is broken.” “The credit card chargeback process is designed to hurt merchants.” “Merchants are helpless in the fight against credit card chargebacks.”
No. No. No.
The first step in learning about your rights is in reviewing the documentation provided to you by Visa, Mastercard, Discover, and American Express. These major credit card issuers have rules and regulations in place that protect you from acts of friendly fraud and chargeback fraud. When you adhere to issuer regulations, you are extended protection from chargebacks.
The rules around return and refund policies, for example, are designed to protect you from unwarranted returns. Make sure you’re up-to-date on the rules and regulations attached to your issuer – doing so extends your merchant chargeback rights and protects you from chargebacks.
Along with the protection extended to you by issuers, don’t forget these key protection merchant protection measures.

  • Reason codes. Reason codes give you insight into why the chargeback was filed. In some cases, the reason code clearly specifies that the cardholder must work with you to solve the problem.
  • No cash-back transactions. Chargebacks cannot be filed as a cash-back remedy for a disputed transaction.
  • Late delivery. If the product arrives late, the customer cannot automatically file a chargeback. The customer must first attempt to return the item to you before filing a chargeback.
  • 15-day waiting period. The issuer must wait 15 days after a customer return to file a chargeback. This gives you time to communicate with the customer and to process a refund.
  • Purchase price only. The chargeback value only extends to the cost of the product and doesn’t include shipping, handling, and other surcharges.

We urge you to skip over blog posts and articles that spread misinformation about an anti-merchant/pro-customer chargeback process.
The chargeback process is not positioned against you – it’s designed to work for everyone involved.
The Right of Chargeback Representment
Perhaps your most important credit card chargeback right is that of representment. We want you to dispute chargebacks and take full advantage of your rights of representment. Doing so strengthens the chargeback process and sends a clear message to fraudsters and thieves that you will not stand idly by and accept chargeback fraud.
True, disputing a chargeback does take work – but when done right, the payoff is huge. The key to a successful chargeback representment is in being prepared. Make sure you’re using the tools and resources that allow you to easily collect the compelling evidence required to win your representment case.
The chargeback representment process is the best way for you to highlight fraudulent chargebacks – proving that you won’t be bullied by theft and fraud.
Learning More About Merchant Chargeback Rights
When it comes to your chargeback rights – the more you know, the better. Use the resources below to learn more about your credit card chargeback rights.

Remember to browse our Resource Center and Knowledge Base for more articles and content about chargebacks and your merchant rights.