How to Win Credit Card Chargebacks as a Merchant


We’ve all been there as an eCommerce owner: you excitedly ship out a $1,500 order to a customer, and then a few weeks later you’re notified that the customer has filed a chargeback.

You double and triple check your customer service records to see if the customer wrote in about the shipment (they haven’t), you check the tracking page to make sure the package was delivered (it was), and you check the order to make sure the billing address and shipping address are the same (they are). And now your credit card processor has taken $1,500 out of your bank account, plus a $50 chargeback fee, and you’ve also lost the inventory that you shipped out. ?

It feels like someone has stolen from you. And the only way to recover these losses is to take on one of the most difficult tasks for an eCommerce owner: winning a credit card chargeback dispute.

This guide will go over why customers file chargebacks, what chargebacks are worth fighting, and the tactics you need to win a chargeback as a merchant.


Table of Contents

  • Why Customers File Chargebacks
    • ? Legitimate Chargebacks
    • ? Borderline Chargebacks
    • ?Abusive Chargebacks
  • How to Win Chargebacks
  • How to Prevent Chargebacks in the First Place
    • Communicate (and Overcommunicate)
    • Negotiate
    • Investigate
    • Automate
  • Final Thoughts: How to Win Credit Card Chargebacks as a Merchant (the Sad Truth)
    • Want to End Credit Card Chargebacks? Learn from 1,000+ Merchants How They’re Fighting Fraud and Chargebacks

Why Customers File Chargebacks

Chargebacks exist to protect customers, and they are one of the main benefits of using a credit card. Unfortunately for merchants, the reasons for chargebacks range from legitimate to outright thievery.

? Legitimate Chargebacks

When someone’s card number has been stolen and the thief has charged that card, chargebacks are the best option. Unfortunately, as a merchant, you will never win these cases and should not even try; instead you should put in place systems to prevent fraudulent orders from being fulfilled in the first place. More on how to prevent fraudulent orders below ?.

True fraud can add up quickly; one forum member was losing $500 per day before stamping out the problem.

In addition to fraud, if a customer receives an item that is defective in some way, and their attempts to reach out to the store go unanswered, a chargeback is the tool of last resort for them to recover money they’ve spent on an item they can’t use.

? Borderline Chargebacks

A very common reason for a chargeback is that a shipment either never arrives or arrives damaged. In these cases, what a customer should do is reach out to the store so that the store can file a claim with the shipping carrier and send a replacement.

Unfortunately, some customers will see it as less hassle to file a chargeback than to contact a store, especially if it’s been a few weeks and in the interim they’ve decided that they didn’t really want the item (AKA buyer’s remorse).

Confusion about credit card charges can also lead to chargebacks. Many spouses share a single credit card, and often children have access to credit card numbers as well, so the main card user will look over their statement, see a charge from a company they’ve never heard of, and immediately file a chargeback without checking with other members of their household.

In many cases this happens when a card owner feels like their credit card balance is higher than it “should” be, so they file chargebacks first and ask questions later (or never).

?Abusive Chargebacks

The last, and trickiest, reason that customers file chargebacks is known as “friendly fraud.” In this case, a customer places an order, receives the item, but is unhappy with the item and feels like they shouldn’t have to pay for it. In many of these cases the customer is angry because they’ve asked you for a refund and were denied.

As a store owner, you can have many legitimate reasons for denying a refund. Maybe you sell custom, one-off items that can’t be returned, and you have clearly stated language on your site to that effect. Or you sell clothing, and the customer has decided six months after their purchase that they’re unhappy and want to return an unsellable product to you for a full refund.

There is also an infuriating variant of friendly fraud which is functionally shoplifting: a customer orders something, receives it, enjoys the product, but files a chargeback anyway and claims that it never arrived. Maybe the customer believes that your item was overpriced or otherwise imperfect, and that it’s only fair that they shouldn’t pay for it.

As a forum member writes:

There may be a culture of credit card abuse, where customers may use chargebacks as a means to receive a full refund for perceived issues or dissatisfaction.

In a world where large retailers will issue no-questions-asked full refunds for almost any order, some customers believe that online shoppers have the right to free merchandise if it falls short of their expectations in any way.

How to Win Chargebacks

When a customer files a chargeback, you will have an opportunity to contest the chargeback through your credit card processor.

Time is of the essence: if you feel that a chargeback is illegitimate, file the counterclaim immediately. ?

You want to provide the following information:

  1. Proof that the customer placed the order. This can be a screenshot of your order page. It will substantially help your case if the billing address matches the shipping page. If your site requires a login to place an order, proof that the customer logged in will be further evidence that the customer actually placed the order.
  2. Proof that you shipped the order and the order was delivered. You should provide a copy of the shipping label, a PDF of the tracking page, as well as a link to the tracking page. If your shipment was more than a day or two after the order date, you should also provide a screenshot of your stated shipping times, presale or backorder notice, or anything else that explains why the order did not ship right away.

    If there is a customer service email record, a screenshot of that can prove that the item was received. Some store owners shipping high-value items have even found it worthwhile to photograph or video every order as it’s packed to head off claims that the box didn’t contain the item that was ordered.

  3. Specific evidence to counter their claim. This will generally be screenshots of your terms and conditions. If a customer wants to return a custom item that’s ineligible for return, provide a screenshot of the portion of your site when you state the items cannot be returned. If the customer is unhappy about the color of the item, send the screenshot where you note that on-screen colors won’t always match the actual item. This will be specific to your case, but the more evidence you can provide here, the better.

    Screenshots of customer service interaction can also serve to prove that you attempted to resolve the issue, and could even catch the customer in an admission that they know they aren’t actually entitled to a refund.

Again, it’s important to stress that you should file a claim immediately. Decide if you want to fight the chargeback and then commit. If you commit, and submit the evidence promptly you’ll have a good chance of winning the chargeback. If you win more chargebacks you’ll keep more cash on hand which you need to grow your business.

Automatic Chargebacks on Shopify

If you’re in Shopify, note that Shopify will automatically file a chargeback response on your behalf which will include most of the information above, but it’s best practice to add more if you can. In addition to sending documentation to your credit card processor, you should also reach out to the customer if there has been no communication to this point. Simply state you were notified of a chargeback and were hoping to resolve it.

Communicate With the Customer

People often forget about items they’ve ordered, or they email about issues to the wrong customer service address, so occasionally a simple email exchange can lead to a chargeback being withdrawn. You can also use this exchange to gather further information for your chargeback response. For instance, if the customer has alleged that the package was delivered but stolen off their front porch, ask if a police report was filed.

If you lose a chargeback case that you feel you should have won, you do have a nuclear option ?: threaten to send the customer to collections over the unpaid debt. 

? This tactic should only be pursued in cases where a customer is blatantly attempting to steal from your business and you have exhausted all other options.

How to Prevent Chargebacks in the First Place

Winning a chargeback is hard, but you can prevent most chargeback situations from arising in the first place with a few simple tactics.

Four ways to prevent credit card chargebacks

Communicate (and Overcommunicate)

Customers aren’t going to read everything on your site, and it is unlikely they’re going to click into a separate page filled with hundreds of words on your terms and conditions. Instead, you should note in as many places as possible terms like shipping times, your return/refund policy, what to do if a package never arrives or arrives damaged, etc.

Put this information on your cart page, on your order confirmation page, and in your order confirmation email. And make sure that you clearly include a tracking number in your shipping confirmation email.

If there are frequent customer service issues that lead to chargebacks, such as a shirt fitting looser than expected, note on your product page that the shirt runs large. And make sure that your company name and a contact number appears clearly on credit card statements.


When unhappy customers write in with a complaint, respond promptly and try to solve their problem. If they’re unhappy with the product, you might want to offer them a return even if they’re outside the return window just to head off a chargeback situation.

A partial refund or even a total refund will be cheaper than losing a chargeback, which means losing 100% of the charge plus chargeback fees.


Shopify has built-in fraud filters, and will flag orders that meet certain criteria. If a large order comes in, with a shipping address that doesn’t match the billing address, and the order was placed from an IP address that’s 1,000 miles away from either address, be very skeptical of credit card fraud. ?

Most scammers will not be so brazen as to ship stolen goods to their own US address, so be extra skeptical of shipments to overseas destinations, or shipments to US-based parcel-forwarding companies that will send the package overseas.

If you’re unsure about the legitimacy of an order, it is completely reasonable to email the customer and ask for them to submit a photo of the credit card itself alongside a photo of their ID. And note that determined scammers will attempt to Photoshop this, so ask for the photo at an angle that will make it hard to fake with software.

Even if the credit card transaction looks legitimate, for very high value orders it can be worth simply emailing the customer to ensure the order is correct. Perhaps they fat-fingered the item quantity. If you don’t allow return, or only allow returns within a certain window, state this in the email and ask them to confirm before you fulfill it. It might also be worth it to require a signature from the shipping carrier to prevent front porch theft or claimed front porch theft.

There are also automated services, such as Kount, which will rate the customer’s email address for fraud; brand-new email addresses are very suspect


If you capture the payment on a fraudulent order, and then later cancel the order after confirming that it’s fraudulent, Shopify will not refund the credit card processing fee. If you deal with a large amount of fraudulent orders this can quickly add up.

Your site could be targeted by scammers who aren’t looking to steal goods but are instead checking to see if stolen credit numbers are still working. In situations like this, you could see hundreds of fraudulent orders per year, and you could lose the processing fees even if you don’t ship a single order.

So set up a Shopify Flow (an automated set of events) to only auto-capture payments on orders with zero fraud flags. All orders with even the slightest signs of fraud, such as those placed via a VPN, should be looked at by a human before payment is captured.

A sample Flow in Shopify that captures low-risk payments and otherwise sends a Slack message for a human to investigate.
A sample Flow in Shopify that captures low-risk payments and otherwise sends a Slack message for a human to investigate.

If you encounter a case of “friendly fraud” from a customer, you should blacklist the customer’s email and physical address so that future orders are auto-canceled. And if you’ve found that a certain freight-forwarding address, or even a certain zip code, has a high rate of fraud, you can either auto-cancel orders to those addresses or at the very least flag them to be investigated before payment is captured.

Final Thoughts: How to Win Credit Card Chargebacks as a Merchant (the Sad Truth)

Most credit card companies will side with customers. Your credit card processor isn’t going to fight that hard against a credit card company, even if you provide all of the necessary evidence. You’ll have better luck preventing chargebacks by not shipping to sketchy customers than winning against scammers.

The most important thing is to not lose time—and sanity—on these rare cases, in addition to losing money.

Want to End Credit Card Chargebacks? Learn from 1,000+ Merchants How They’re Fighting Fraud and Chargebacks

Join eCommerceFuel and link arms with over 1,000 7- to 8-figure store owners dedicated to beating scammers and growing their online businesses. There are dozens of conversations about preventing fraud and discussing fraud prevention services.

You can learn more about our community of chargeback warriors, or apply to join today.