Chargebacks

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

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Table of Contents

  1. What are chargeback time limits?
  2. When can you chargeback a transaction?
  3. How long do you have to respond to a chargeback?
  4. What are Visa's chargeback time limits?
  5. How long do you have to respond to a Visa chargeback?
  6. What are Mastercard's chargeback time limits?
  7. How long do you have to respond to Mastercard chargebacks?
  8. What are American Express’s chargeback time limits?
  9. How long do you have to respond to American Express chargebacks?
  10. What are Discover's chargeback time limits?
  11. How long do you have to respond to Discover chargebacks?
  12. Put dispute time back on your side
  13. Do banks investigate chargebacks?

Throughout the chargeback process, there are a variety of different time limits that apply to the various parties involved. Cardholders, merchants, and banks are all subject to deadlines that determine how long they have to initiate or respond to various steps in the chargeback process. Even worse, the specific time limits can vary depending on which card network you're dealing with.

For merchants who are making proactive efforts to deal with chargebacks, including fighting friendly fraud, it's crucial to be aware of all the time limits involved in the process and how they may vary by network. After all, missing a deadline will result in the chargeback automatically being decided against you, and may even result in additional fees.

What are chargeback time limits?

To better serve customers and place limits on how long a cardholder or merchant can drag out a chargeback, card networks put chargeback time limits in place.
 
These time limits give clear guidelines to all parties for how long each step in the process will take while making sure 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:
 
  • Identity theft. If a cardholder has had their information stolen and used to make a fraudulent purchase, they can file a chargeback.
  • 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. 

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.

How long do you have to respond to a chargeback?

Visa, MasterCard, American Express, and Discover all have similar, but not identical, chargeback terms and time limits. This article will cover each in turn.

To 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 fraudulent 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 you have to respond to a Visa chargeback?

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 Fight & Recover Chargebacks - Get The Guidenew 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 also has a 120-day time limit for filing a chargeback in most cases. Like Visa, Mastercard also has a shorter time limit that applies to certain chargeback reasons, but that time limit is only 45 days. In addition, Mastercard starts the clock on the day of the transaction, not the day after.

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 

In 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 you have to respond to Mastercard chargebacks?

Mastercard allows 45 days to respond to 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.

  • 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 you have to respond to American Express chargebacks?

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.

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.

How long do you have to respond to Discover chargebacks?

Like American Express, Discover may or may not send an inquiry before filing a chargeback. Merchants have 20 days to respond to an inquiry.

When a chargeback occurs, merchants have 30 days to initiate a representment request. Once a chargeback has been decided, either party has 10 days to file for arbitration.

Put dispute time back on your side

New call-to-actionEvery 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.  

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.

Are you looking to stop the ever-growing chargeback trend and protect your revenues?  If so, you must first take steps to understand the problem.  Download the free Chargebacks 101 Guide to better understand the root causes of chargebacks and how the overall chargeback process works so you can fight customer chargebacks and prevent them in the first place.

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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