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title: "Chargebacks: What They Are and What to Expect"
canonical: "https://help.spoton.com/space/SK/4214095933/Chargebacks%3A%20What%20They%20Are%20and%20What%20to%20Expect"
format: markdown
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If a customer disputes a charge, their card issuer may initiate a chargeback. This process temporarily reverses the payment while the claim is reviewed. As your payment processor, we want to help you understand how chargebacks work, what your responsibilities are, and how to protect your business.

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## **What is a Chargeback?**

A chargeback occurs when a cardholder contacts their bank to dispute a charge. When this happens, the disputed amount is pulled from your account and held until the case is resolved.

Chargebacks are intended to protect customers from fraud or errors, but they can also create challenges for your business, especially when they’re unexpected.

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## **Common Reasons for Chargebacks**

Customers may file a chargeback for reasons such as:

- They didn’t receive the product or service.
- The item was damaged, defective, or not as described.
- They don’t recognize the charge on their statement.
- They were charged more than once.
- They believe the charge was fraudulent.

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## **What Happens When a Chargeback Is Filed**

- You will be notified of a pending dispute in three* *different ways: a red Dashboard banner, a Dashboard inbox notification, and an email.
- The funds are withdrawn from your account while the case is under review.
- You’ll have the option to respond by submitting evidence to support the validity of the transaction.
- The card issuer will make a decision based on the documents provided.

Note:** Deadlines for submitting evidence are strict**. Be sure to respond within the timeframe provided.

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## **What You Can Submit as Evidence**

Depending on the dispute type, relevant documentation may include:

- Order confirmations or signed receipts
- Shipment tracking or delivery confirmation
- Screenshots of communication with the customer
- Your refund policy or terms and conditions
- Proof of refund already issued (if applicable)

**Important:** If you’ve already received a chargeback notice and have confirmed that the cardholder is correct (for example, they were double charged or charged by mistake), **do not issue a refund.** At this point, it’s too late to reverse the charge through a refund.

- Instead, simply **choose not to dispute** the chargeback.
- This means the cardholder will automatically win the case, and no further action is needed on your part.

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## **Chargeback Fee**

A non-refundable chargeback fee is applied to cover processing and administrative costs. The exact amount is listed in your signed Merchant Application.

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## **Tips to Prevent Chargebacks**

- Use accurate, detailed product and service descriptions.
- Respond quickly to customer questions or complaints.
- Include tracking and delivery confirmation for all shipments.
- Maintain clear, accessible refund and return policies.
- Keep thorough records for every transaction.
- Get a new authorization if the tip exceeds 25%
  - Card networks stipulate that the tip amount should not exceed 25% of the approved transaction total; they guarantee coverage only up to 25% of the approved amount. Any tip exceeding this limit may be subject to a chargeback, and merchants generally do not win these chargebacks.

## **How to appeal a Chargeback?**

For instructions on appealing a chargeback, visit [How to Appeal a Chargeback](https://help.spoton.com/space/SK/2058190873/How+to+Appeal+a+Chargeback%7C+SpotOn+Merchant+Dashboard)