Chargeback Management

Chargebacks in Online Marketplaces

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Handling chargebacks is a crucial aspect of running a successful e-commerce business. Unfortunately, it can also be quite complicated, especially for merchants who sell through one or more online marketplaces.

Each of these marketplaces has its own rules for how it handles chargebacks and what level of involvement is expected, or even allowed, from the merchant. In this article, we’ll discuss how chargebacks in online marketplaces work and go over the policies of some of the major players.

How Do Chargebacks in Online Marketplaces Work?

When selling through an online marketplace, the marketplace functions as the merchant of record. That means chargebacks on purchases will go to the marketplace rather than to the merchant. It doesn’t mean the marketplace will absorb the costs, however.

fraud Prevention- Proven Strategies to prevent e-commerce fraud When non-fraud chargebacks occur, they’ll typically pass on the costs of a chargeback to the relevant merchant, often along with an additional fee.

Other policies common to most online marketplaces include:

Monitoring and Notification

Online marketplaces notify merchants promptly when a chargeback is initiated, providing details of the disputed transaction and the necessary information to respond within the designated timeframe.

Documentation and Evidence Collection

Merchants are expected to maintain comprehensive transaction records, including order details, shipping information, communication history, and any other supporting evidence that can be used to substantiate the validity of the sale.

Chargeback Representment

Merchants may be able to respond to chargebacks with compelling evidence proving the dispute is invalid. Marketplaces vary in regard to how much of this process is handled by the marketplace vs. the merchant.

How Do Amazon Chargebacks Work?

Like many marketplaces, Amazon tries to divert dissatisfied customers to options other than chargebacks if possible. First, Amazon requests that buyers first lodge a complaint with the platform itself before initiating a chargeback. This is done through the Amazon Pay Buyer Dispute Program, where customers can contact Amazon to seek resolution.

Amazon acts as a mediator in these cases and provides an opportunity for sellers to directly address customer issues, such as offering refunds or resolving delivery problems.

Second, Amazon offers buyers an “A-to-Z guarantee.” This payment protection policy aims to increase consumer confidence in third-party sellers using Amazon's services. Buyers can request a refund for eligible payment disputes by first contacting the merchant to negotiate a satisfactory resolution.

Finally, if a customer proceeds to file a chargeback with their bank, sellers have the option to dispute false claims and have Amazon handle the case on their behalf. If they want to pursue this option, sellers are required to pay a disputed chargeback fee of $20 and provide evidence against the claim. Amazon assists sellers in compiling evidence and building a strong case for representment.

Sellers are not usually held liable for fraud-related chargebacks since Amazon handles the checkout process and is therefore responsible for fraud detection and prevention.

How Do eBay Chargebacks Work?

eBay’s Money Back Guarantee is the platform’s own way of diverting customers from filing chargebacks. When a customer pursues this option, the seller has 3 days to resolve the issue to the customer’s satisfaction. After that point, the case may be escalated to seek a decision from eBay.

BNPL E-GuideWhen a chargeback is filed against an eBay purchase, the seller has the option to accept or challenge it within 5 calendar days.

If the seller accepts the dispute, the refund is typically deducted from their available funds, and eBay will waive the dispute fee. If the seller chooses to challenge the dispute, they can provide supporting evidence to help resolve the issue.

There are instances where eBay may handle a payment dispute on the seller’s behalf, even if the seller accepted the dispute. Sellers will not incur any dispute fees when this happens.

How Do Walmart Marketplace Chargebacks Work?

If a customer contacts a merchant about an issue with their purchase prior to initiating a chargeback, Walmart requires the merchant to respond within 48 hours.

If a return is requested, Walmart may choose to issue that refund without the merchant’s approval. However, the merchant has 45 days to dispute such returns.

In cases of credit card chargebacks, Walmart follows the standard practice of absorbing the costs of fraud-related chargebacks while passing on all other chargebacks to the merchant. However, Walmart’s policies for sellers don’t seem to indicate any process for disputing illegitimate chargebacks.

Best Practices for Handling Chargebacks in Online Marketplaces

While each online marketplace has its own chargeback policies, merchants can adopt the following best practices to effectively manage chargebacks:

  1. Maintain Detailed Records: Keep meticulous records of transactions, communication, shipping information, and any relevant evidence to support your case during the chargeback process.
  2. Promptly Respond to Notifications: Respond to chargeback notifications within the specified timeframe to ensure you’re not incurring additional fees or missing opportunities to recover revenue.
  3. Provide Compelling Evidence: Prepare a well-documented response that includes evidence demonstrating the validity of the sale, product quality, and any other pertinent information to support your position.
  4. Communicate with Buyers: Engage in open and constructive communication with buyers to address concerns and potential issues before they escalate to chargebacks.


Managing chargebacks effectively is vital for merchants operating in online marketplaces. By familiarizing themselves with the chargeback policies and approaches of major platforms like Amazon, Walmart, and eBay, merchants can gain valuable insights and develop strategies to protect their businesses.

Implementing best practices and engaging in proactive chargeback management will not only minimize financial losses but also foster positive customer relationships, ensuring long-term success in the dynamic world of e-commerce.

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