How the Chargeback Process Works: Complete Timeline for Merchants
A chargeback is not a refund. It is a formal dispute governed by card network rules with specific deadlines, evidence requirements, and financial consequences at each stage.
Updated April 2026
Process Overview
Customer Files Dispute
60-120 days after transactionCardholder contacts their bank. Bank issues provisional credit.
Chargeback Issued
Within 30 days of disputeBank assigns reason code. Fee debited from merchant. Notification sent.
Representment
7-20 day response windowMerchant submits evidence. The critical action window.
Issuer Decision
30-60 days after responseIssuing bank reviews evidence. Reversal or upheld.
Arbitration (Optional)
30-90 additional daysCard network makes final ruling. $250-$500 filing fee.
Stage 1: Customer Files Dispute
The process starts when a cardholder contacts their issuing bank to dispute a charge. Common triggers: unrecognized charge on statement, item not received, item not as described, unauthorized transaction, or forgot they subscribed.
The cardholder does not need to contact the merchant first in most cases. Banks make the dispute process easy (often one click in their app). The bank issues a provisional credit to the cardholder while the dispute is investigated.
Dispute filing windows
Stage 2: Chargeback Issued to Merchant
The issuing bank reviews the claim and, if accepted, initiates a formal chargeback. This involves:
- Reason code assigned: A standardized code (Visa 10.x-13.x, Mastercard 48XX) categorizing the dispute type. This determines evidence requirements.
- Fee debited: Your processor charges the chargeback fee ($15-$100) and debits the disputed amount from your settlement account.
- Notification sent: Your processor notifies you via dashboard, email, or API webhook. The response clock starts now.
- Ratio impact: The chargeback counts against your Visa VAMP and Mastercard ECM ratios immediately, regardless of outcome.
Stage 3: Representment (Your Response Window)
This is the critical stage. Miss this window and you lose automatically.
Representment is your opportunity to contest the chargeback by submitting evidence. You are re-presenting the transaction to the issuing bank with documentation that the charge was legitimate.
Response deadlines
Your processor may set shorter internal deadlines than the card network allows. Always respond within your processor's deadline, not the network's.
Stage 4: Issuer Decision
After you submit evidence, the acquirer forwards your response to the issuing bank. The issuer reviews both the cardholder's claim and your evidence.
If you win
- Disputed amount returned to your account
- Bank fee refunded (if your processor refunds on win)
- Chargeback still counts against your ratio
- Timeline: 30-60 days after your response
If you lose
- Funds remain with the cardholder
- Bank fee is not refunded
- Option to escalate to pre-arbitration
- Total cost: original amount + fee + labor
Stage 5: Pre-Arbitration and Arbitration
If you lose representment and believe your evidence was not properly considered, you can escalate to pre-arbitration (second chargeback) and then to arbitration.
The card network makes a binding decision. The losing party pays the filing fee. Arbitration is a last resort for high-value disputes where you have strong evidence that was not properly evaluated during representment.
Timeline Summary
Key Deadlines Not to Miss
The representment window is the only deadline that matters.
If you miss it, you lose automatically with no appeal. Set up alerts in your processor dashboard. If you handle more than 10 disputes per month, use a chargeback management tool that tracks deadlines.
- Stripe: 7-21 days depending on dispute type. Check the Stripe Dashboard for the exact deadline on each dispute.
- PayPal: 10 days from notification. Available in the Resolution Center.
- Shopify Payments: 7-21 days. Deadline shown in the Shopify admin dispute screen.
- Square: Square handles disputes internally. You have limited input into the process.
FAQ
How long does a chargeback take from start to finish?
60-120 days for the full process. The customer has 60-120 days to file. Once filed, the merchant has 7-20 days to respond. The issuer takes 30-60 days to decide. If escalated to arbitration, add another 30-90 days. Total elapsed time from transaction to final resolution can exceed 6 months.
What is representment?
The formal process of contesting a chargeback by submitting evidence to the issuing bank through your payment processor. You re-present the transaction with documentation (delivery proof, 3DS records, customer communication) supporting that the charge was legitimate. If accepted, the chargeback is reversed.
What happens if I do not respond to a chargeback?
You lose automatically. The disputed amount and bank fee are permanently deducted. There is no second chance or appeal. Approximately 57% of merchants do not respond to chargebacks, forfeiting funds that could potentially be recovered.
Is arbitration worth the cost?
Only for disputes above $500 (Visa) or $300 (Mastercard) where you have strong evidence that was not properly evaluated during representment. The filing fee ($250-$500) is non-refundable for the losing party. Arbitration win rates are not publicly disclosed but are estimated at 30-40% when merchants have compelling new evidence.
Does winning a chargeback fix my ratio?
No. The chargeback counts against your Visa VAMP and Mastercard ECM ratios regardless of outcome. Winning recovers the funds but does not undo the ratio impact. This is a critical distinction: prevention removes a chargeback from ever entering the ratio, but winning only recovers money.