A chargeback is a forced reversal of a completed card payment, initiated by the cardholder's bank rather than by you. The money is pulled back, usually with a non-refundable fee, and you can contest it by submitting evidence. It is a consumer-protection mechanism baked into the card networks for fraud, items not received, or dissatisfaction. It is not the same as a refund, which you issue voluntarily.
These three get muddled. A refund is money you send back yourself, on your terms - no penalty, no bank involved. A dispute or inquiry is a softer first step, where the issuer (often American Express or Discover) asks you to clarify a charge before it becomes formal. A chargeback is the full reversal: the issuing bank sides with the cardholder, debits the amount from you, and applies a fee. The key difference is who is in control - a refund is your decision, a chargeback is the bank's.
A chargeback typically runs 30 to 90 days from start to finish. The stages: (1) the cardholder disputes the charge with their issuing bank, citing a reason code - Visa groups these into Fraud, Authorisation, Processing Errors and Consumer Disputes; (2) the card network debits the amount from your balance and holds it; (3) you have roughly 7 to 21 days to respond with evidence, a step called representment - delivery confirmation, AVS results, logs, customer communication tied to the reason code; (4) the issuer reviews and takes about 60 to 75 days to reach a final decision of won or lost. Cardholders can generally file up to 120 days from the transaction date. Sources: Stripe - how disputes work · Pagos - chargeback lifecycle
A chargeback costs the disputed amount plus a per-dispute fee, and if you lose you forfeit the sale, the goods or service, and the fee. Stripe charges a $15 dispute fee in the US, non-refundable, and since June 2025 adds a further $15 counter fee when you contest and lose - so a lost, contested dispute can cost up to $30 in fees alone on top of the sale. PayPal's chargeback fee is around $20, rising for high dispute rates. There is also a threshold risk: card networks run monitoring programs (Visa's VDMP required a 0.9% dispute ratio and 100+ disputes; it is being folded into the broader VAMP), and crossing them triggers fines and remediation. This is why prevention beats fighting. Sources: Stripe dispute fees · PayPal chargeback fee · Visa VDMP thresholds
Most chargebacks are preventable. The high-leverage moves: use a clear billing descriptor so buyers recognise the charge on their statement; make refunds and cancellation easy so people ask you before asking their bank; keep proof of delivery and clear terms; send receipts and renewal reminders for subscriptions; and use 3-D Secure and AVS/CVC checks to shift fraud liability and block bad transactions before they settle. The pattern is simple - the customer relationship is your best defence, which is exactly what you keep when you stay the merchant rather than hand the sale to someone else.
paas.build runs on UniPaaS, an FCA-authorised Payment Institution (No. 929994) settling through a tier-1 global bank. Because paas.build is a PayFac, not a Merchant of Record, you stay the merchant: disputes surface in your portal with the reason code and the response window, and you hold the customer relationship and evidence that prevent and win them. Progressive-KYB caps also bound early exposure while you verify. The honest boundary: since you are the seller, chargebacks are yours to manage - that is the trade for owning your customers and your funds, instead of handing the transaction (and the control) to an intermediary. If you would rather someone else absorb dispute liability entirely, that is a Merchant of Record's job, at a higher fee.
A chargeback is when a customer asks their own bank to reverse a card payment instead of asking the merchant for a refund. The bank pulls the money back from the merchant and usually charges a fee. It is a consumer-protection tool built into the card networks for fraud, items not received, or disputes - and it is different from a refund, which the merchant issues voluntarily.
A chargeback typically costs the disputed amount plus a per-dispute fee. Stripe charges a $15 dispute fee in the US, non-refundable, plus a further $15 counter fee if you contest and lose (since June 2025). PayPal's chargeback fee is around $20. If you lose, you forfeit the sale, the goods, and the fee - which is why prevention beats fighting.
A chargeback usually runs 30 to 90 days end to end. The cardholder disputes with their bank, the amount is debited from the merchant, the merchant has roughly 7 to 21 days to submit evidence (representment), and the issuer then takes about 60 to 75 days to decide. Cardholders can typically file up to 120 days from the transaction.
paas.build runs on UniPaaS, an FCA-authorised Payment Institution (No. 929994). You stay the merchant, so disputes surface in your portal with the reason code and the window to respond, and you keep the customer relationship needed to prevent them. Progressive-KYB caps also bound early exposure. Because you are the seller, chargebacks are yours to manage - the honest trade for owning your customers and your funds.