Chargebacks

Don't Run Out the Clock: Understanding Chargeback Time Limits

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Table of Contents

  1. When Can You Chargeback a Transaction?
  2. What’s the Time Limit for Filing a Chargeback?
  3. How Long Do Merchants Have to Respond to a Chargeback?
  4. What Are Visa's Chargeback Time Limits?
  5. How Long Do Merchants Have to Respond to Visa Chargebacks?
  6. What Are Mastercard's Chargeback Time Limits?
  7. How Long Do Merchants Have to Respond to Mastercard Chargebacks?
  8. What Are American Express's Chargeback Time Limits?
  9. How Long Do Merchants Have to Respond to American Express Chargebacks?
  10. What Are Discover's Chargeback Time Limits?
  11. How Long Do Merchants Have to Respond to Discover Chargebacks?
  12. Put Dispute Time Back on Your Side
  13. Do Banks Investigate Chargebacks?

For many merchants, chargebacks are a common source of frustration and confusion. Part of this comes from the fact that every card network sets its own rules for the chargeback process. While many of the basics tend to be similar from one network to another, one area in which the networks differ significantly is when it comes to the time limits and deadlines involved.

Sometimes, these differing time limits can cause a merchant to miss a deadline they thought was still weeks away. When that happens, the merchant loses the opportunity to fight the chargeback, and they may even be charged an additional fee for failing to respond in time.

While we always recommend responding to chargebacks promptly, it's important to be aware of exactly how much time you have in case something comes up that gets in the way of a timely response. To help you avoid missing those crucial deadlines, we'll go over the current time limits for every stage of the process on each of the major card networks.

New call-to-actionEach card network establishes time limits for the various stages of the chargeback process in order to ensure it doesn’t drag out too long. Both sides of a dispute are subject to these time limits.

Having established deadlines makes it clear how long each step in the process will take while ensuring there's still enough time to gather any necessary information for the next step.

When Can You Chargeback a Transaction?

Cardholders can chargeback transactions primarily in cases of fraud. This includes lost or stolen cards, stolen payment credentials, and account takeover fraud.

  • Lost or stolen cards: If a credit card that has been lost or stolen is used to make a purchase, the cardholder can file a chargeback.
  • Stolen payment credentials: If a fraudster gains access to someone’s credit card information through something like a phishing scam or a database leak, the cardholder can file a chargeback.
  • Account takeover fraud: If a fraudster gains access to an eCommerce account with saved payment credentials and uses those saved credentials to make a purchase, the cardholder can file a chargeback.

Merchants shouldn't attempt to fight true fraud chargebacks. In some cases, however, a chargeback where the customer is claiming fraud may actually be friendly fraud in disguise. If there is reason to believe that the cardholder's claims about fraud are false, it's often a good idea to fight the chargeback.

There are also rare cases where a cardholder may be entitled to file a chargeback due to an uncooperative merchant.

If the customer was charged twice for the same purchase or if the merchandise was damaged or lost in shipping, for example, most merchants will simply issue a refund as soon as they're made aware of the problem. If a merchant refuses to refund such a purchase, however, the cardholder can file a chargeback. Cardholders are required to attempt to resolve these kinds of problems with the merchant before disputing a charge, but this rule isn't always followed.

While merchants can't fight legitimate chargebacks arising from these issues, they can prevent them by having easily reachable customer service that can issue refunds to such customers.

What’s the Time Limit for Filing a Chargeback?

Each card network and issuing bank sets its own time limits for filing a chargeback. However, the legal minimum time limit for filing a chargeback in the United States is 60 days, and most banks give cardholders 120 days to dispute a charge.

How Long Do Merchants Have to Respond to a Chargeback?

The deadline for responding to a chargeback varies by card network, but the most common time limit is 30 days. Note that this is measured from the day the chargeback was filed, which may be several days prior to when the merchant is notified.

Fight & Recover Chargebacks - Get The GuideTo deal with chargebacks effectively, you should be familiar with the particulars of each type of card your business accepts. You don't ever want to be in the position of getting hit with a chargeback and losing money simply because you let a deadline slip by.

What Are Visa's Chargeback Time Limits?

For Visa, the clock starts ticking the day after the transaction processing date. In most cases, cardholders have a 120-day window after that date in which they may dispute a charge. However, there is also a shorter 75-day window for certain issues.

Cardholders have 120 days to file a chargeback for issues related to:

  • Fraud
  • Late presentment
  • An incorrect transaction code, currency, account number, or amount
  • Duplicate transaction processing
  • Merchandise that's not received
  • Damaged or defective merchandise
  • A canceled recurring transaction

Cardholders have 75 days to file a chargeback for issues related to:

  • A card recovery bulletin (for stolen, lost, past-due, or fake cards)
  • Declined authorization, no authorization, or invalid data

How Long Do Merchants Have to Respond to Visa Chargebacks?

As with filing chargebacks, Visa starts counting the days for their time limits the day after the relevant step occurs. In most cases, the deadline for a response is 30 calendar days. However, a shorter 10-day deadline applies when deciding whether to file for arbitration.

  • The merchant has 30 days to fight a chargeback by submitting representment
  • The issuing bank has 30 days to initiate a pre-arbitration chargeback after receiving representment
  • Either party has 10 days to pursue arbitration after the pre-arbitration chargeback occurs

Each time a chargeback moves to a new stage of the process, the bank that submitted the chargeback has five days to provide documentation to both the merchant and the cardholder explaining the reasons behind the decision they made.

What Are Mastercard's Chargeback Time Limits?

Mastercard has a time limit of 120 days for filing a chargeback in most cases. Certain chargebacks are subject to a shorter deadline of 45 days. In addition, Mastercard starts the clock on the day of the transaction, not the day after like Visa.

Cardholders have 120 days to file a chargeback for issues related to:

  • A discrepancy in the transaction amount
  • Lack of cardholder authorization
  • Fraudulent processing of transactions
  • Canceled recurring transaction
  • Late presentment
  • An incorrect currency code
  • Questionable client activity
  • Credit posted as a purchase
  • Product not as described
  • Goods or services not provided
  • ATM dispute
  • Credit not processed
  • Chip or PIN liability shift
  • Any other unclassified cardholder dispute

The time limit for Mastercard chargebacks drops down to 45 days for:

  • A warning bulletin file
  • An account number not on file

For chargebacks arising from the “Credit Not Processed” reason code, banks must wait 15 days after the date on the credit document, the date merchandise was returned, or the date services were terminated, before processing chargebacks.

How Long Do Merchants Have to Respond to Mastercard Chargebacks?

Mastercard allows 45 days to respond at each stage in the chargeback process. As with the deadline for filing a chargeback, however, that time limit starts on the day the process moves to the next step, not the day after like Visa.

  • The merchant has 45 days to fight a chargeback by submitting representment
  • The issuer has 45 days to initiate an arbitration chargeback after receiving representment
  • Either party has 45 days to pursue arbitration after an arbitration chargeback

What Are American Express's Chargeback Time Limits?

In most cases, American Express cardholders have 120 days after the transaction occurs to file a chargeback. However, for chargebacks related to damaged or defective items, the deadline is 120 days from the day the item was received.

For products or services that weren't received at all, cardholders have 120 days from the day they expected to receive the product or service or from the day they became aware that they would not receive it, whichever came first.

How Long Do Merchants Have to Respond to American Express Chargebacks?

American Express only gives merchants 20 days to respond at each stage of the chargeback process.

Since American Express typically acts and both the card network and the issuing bank, its process is a bit different. Cardholder disputes may begin with an inquiry to the merchant, in which case the merchant has 20 days to respond.

If the response to an inquiry doesn't resolve the issue, or if American Express decides to skip the inquiry altogether, a chargeback will be filed. Merchants also have 20 days to respond to a chargeback. There's no arbitration process for American Express chargebacks.

What Are Discover's Chargeback Time Limits?

Although they recommend customers file disputes within 120 days, Discover does not impose a strict time limit on cardholders' ability to dispute a transaction, choosing instead to determine whether to approve a dispute on a case-by-case basis.

How Long Do Merchants Have to Respond to Discover Chargebacks?

Merchants have 20 days to respond to a Discover inquiry, 30 days to respond to a chargeback, and 10 days to file for arbitration.

Like American Express, Discover may or may not send an inquiry before filing a chargeback, in which case merchants have 20 days to respond. When a chargeback occurs, merchants have 30 days to initiate a representment request. Once a chargeback has been decided, any party who wants to take the case to arbitration has 10 days to do so.

Put Dispute Time Back on Your Side

Every time a customer sets a chargeback request in motion, the clock starts ticking on the merchant's ability to gather and present evidence to refute the chargeback.

In order to successfully get a chargeback reversed and recover the lost revenue, the merchant must put together a representment package that includes compelling evidence proving that the chargeback is illegitimate and a rebuttal letter summarizing the merchant's case and the evidence supporting it. Especially for smaller merchants, that can be a difficult task to try to squeeze in along with normal business operations.

The best way to make sure you're not losing revenue is to have the support of a dedicated team with the resources and the know-how to submit a compelling case on your behalf on time, every time.

If you're looking to fight back against chargebacks, the first step is to understand the problem. Download the free Chargebacks 101 Guide to learn the root causes of chargebacks and how the overall chargeback process works so you can be better equipped to fight and prevent chargebacks.

FAQ

Do Banks Investigate Chargebacks?

Yes, to an extent. Banks will make sure the customer's claim fits a legitimate chargeback reason before opening a dispute and will examine any evidence provided by the merchant. However, in both cases, banks tend to err on the side of the customer.


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