Chargeback Management

Cardholders typically have 120 days from the original transaction date to open a chargeback. Merchants must ensure that they can provide adequate evidence to demonstrate that a chargeback dispute opened by a cardholder on a purchase transaction is invalid. The evidence submitted by the Merchant must directly address the chargeback’s Exception Code. Merchant evidence is reviewed by the Issuer, who determines the outcome of the case.

Merchants should refer to TabaPay’s daily Chargebacks Report to view new chargeback cases and get status updates on existing disputes. The daily Chargebacks Report will show all cases opened in the past 150 days. The daily Exceptions Report identifies all funds movement related to chargebacks on that day.

When an issuer opens a chargeback dispute the cardholder’s payment is immediately reversed and the merchant’s account is debited.

The reason for a dispute can be found by referring to the exception code relayed in TabaPay’s daily Chargebacks Report. Exception codes are network-specific and assigned by issuers.

Merchants can dispute chargebacks by uploading relevant evidence (based on the exception code) via a file request link provided by TabaPay. This evidence is submitted to the card networks in a process known as representment. If a merchant takes no action and does not dispute a chargeback, the case will close 30 days after the exception date and there will be no further movement of funds.


Merchants can dispute a chargeback by following the steps outlined below:

  1. Create evidence to challenge the dispute: Evidence submitted during the representment process should directly address the exception code (Chargebacks Report, column 7) and the description (Chargebacks Report, column 8).


Evidence Document Requirements

The card networks will reject a merchant’s evidence and the dispute will not be represented if the following conditions are not met:

  • A single PDF file
  • File size cannot exceed 10 MB
  • Documents must not exceed 18 pages in length
  • Please ensure uploaded files are not encrypted or require a password. These are not allowable by the networks.


File Name Requirements

The evidence document uploaded must be named with the chargeback’s Exception ID. (Example: ExceptionID.pdf)

  • The Exception ID is a reference number generated by TabaPay and will identify each chargeback case throughout its lifecycle. It can be found in the merchant’s daily Chargebacks Report, column 5.
  • Do not include any additional characters or spaces before or after the Exception ID in the document name. Documents that do not follow this naming convention will not be logged as received and the chargeback will not be represented.
  1. Submission deadline: Chargeback evidence must be uploaded by the merchant to TabaPay within 10 calendar days of the exception date (Chargebacks Report, column 9).
  2. Upload chargeback documentation: Documentation to dispute chargebacks is only accepted via the file request link for chargeback evidence assigned to the merchant by TabaPay. If you have not received this link, please send a request to [email protected] and include “chargebacks” in the subject line.
  3. Confirm that the document was properly uploaded: When evidence is uploaded successfully to TabaPay, the next day’s Chargebacks Report will show a corresponding change in Action Status (Chargebacks Report, column 10) from “Open – Merchant Debited” to “Documentation Received.”
  4. Monitor the status of chargeback disputes
    1. Status change updates can be found under Action Status (Chargeback Report, column 10).
    2. For most chargeback exception codes, the merchant receives a provisional credit at the time of representment. The issuer has 30 to 45 days (depending on the network) to review the merchant’s evidence. The issuer can either accept the evidence, in which case the provisional credit becomes permanent, or deny it, and the provisional credit will be reversed.
    3. In Visa Fraud (exception code 10) and Authorization (exception code 11) cases merchants are not granted a provisional credit at the time of representment. Funds will not move while a case is open unless the merchant wins the case.

More on Naming Files:

It is critical to ensure that representment files are named correctly. If named incorrectly, TabaPay will not be able to submit the documentation. Refer to the Evidence Document Requirements section above for more information on file requirements. Please refer to the below table for examples of Correct and Incorrect file names:


Status Mapping

Use the following chart to understand the chargeback status within the daily Chargeback Reports:

Exception TypeAction-StatusDays OpenChargeback CycleAdditional Information
CHARGEBACKClosed - 2nd Chargeback - Merchant DebitedLost - FinalTabaPay does not support 2nd chargeback/Pre-Arb stage. No further action.
CHARGEBACKClosedLost - FinalMerchant Lost - No further action.
CHARGEBACKDocumentation Received< 70 daysUnder ReviewDocumentation uploaded - status of the case is pending.
CHARGEBACKDocumentation Received>= 71 daysLost - FinalMerchant Lost - Issuer sided with cardholder based on evidence received.
CHARGEBACKOpen - Merchant Debited< 29 daysOpenMerchant has not taken action to dispute chargeback
CHARGEBACKOpen - Merchant Debited>= 30 daysLost - FinalMerchant Lost - Merchant did not take action to dispute chargeback.
REPRESENTMENTRepresentment - Merchant Paid< 70 daysUnder Review (Could be moved to 2nd CB/Pre-Arb)Provisional Credit.
REPRESENTMENTRepresentment - Merchant Paid>= 70 daysWon - FinalMerchant Won.
REPRESENTMENTClosedWon - FinalChargeback recalled by issuer.

Chargeback FAQs

What is a chargeback?

A chargeback occurs when a cardholder disputes a transaction with their issuing bank. The funds are debited from the merchant exception account along with a chargeback processing fee. The issuing bank returns the funds to the cardholder. A chargeback is effectively a transaction reversal initiated by the cardholder. Some common reasons that chargebacks occur are that the customer does not recognize a transaction on their bank statement, or they never received the goods or services that they purchased.

How are we notified when a chargeback occurs?

Chargebacks are reported on the Daily Exceptions Report and the Daily Chargebacks Report. The chargeback will appear once on an exception report on the day it is reported. Chargeback activity is aggregated on the daily chargeback report. All chargebacks that have occurred within the last 150 days appear on the chargeback report. The Exception Report shows funds movement related to any adjustments, including chargebacks, for a given day.

What is the typical chargeback lifecycle?

Chargebacks often move through at least three stages. The first stage is the open chargeback stage when the merchant has the option to dispute the chargeback. If the merchant opts to dispute, the chargeback moves to the representment stage. The issuer has the option to decline the representment. If the issuer declines the representment, then the chargeback moves to the final stage (the Action Status within the Chargeback Report will show as 2nd chargeback in the reports). There are no further changes after the dispute is closed in favor of the issuer.

Is it worthwhile to dispute chargebacks through compelling evidence?

The decision to dispute chargebacks depends on a variety of factors, including the amount, reason code, and typical win rate. Merchants must weigh the cost of generating evidence against the amount recovered through representment. Fraud prevention is the best strategy to mitigate fraud chargebacks.

Should we dispute a chargeback if we believe that it was true fraud?

No, you should only dispute chargebacks if you have good evidence that the chargeback is invalid or unjustified. True fraud occurs when a bad actor uses stolen credentials to submit a transaction without the cardholder’s authorization. If true fraud occurs, the cardholder is justified in opening a chargeback to recover lost funds. The onus is on the merchant to prevent true fraud through proper KYC and fraud controls. First party fraud occurs when a cardholder opens a chargeback to recover funds on a purchase transaction that they did authorize. First party fraud is perpetrated by the cardholder while true fraud is perpetrated by a bad actor that is not the cardholder. Merchants should only dispute fraud chargebacks when there is good reason to believe it is first party and not true fraud.

Where can I get the Dropbox link to submit compelling evidence to dispute chargebacks?

Email [email protected]. We will respond with a customized Dropbox link that should be used for all of your chargeback evidence.

How do we confirm that compelling evidence was received on a given chargeback?

After you submit compelling evidence to dispute a chargeback, the Action Status column in the chargeback report will change from “Open - Merchant debited” to “Documentation received”. The status change will only be recorded on the chargeback report and not the exceptions report, which only shows financial events. Please review the chargeback report to confirm that evidence was successfully submitted, and reach out to [email protected] if you do not see a change in action status.

Do win rates differ based on exception code?

Yes, fraud chargebacks have relatively low merchant win rates compared to services not rendered chargebacks. The win rates also vary based on the quality of the evidence, the merchant use case, and the network.

How long do we have to respond to a chargeback once we are notified?

Chargeback evidence must be uploaded by the merchant to TabaPay within 10 calendar days of the exception date. This gives us time to submit the evidence to the appropriate network. There is no guarantee of representment after the 10-day window. We strongly recommend that you aim for the 10-day window.

What are the most common chargeback exception codes?

Over 90% of chargebacks are fraud related (Visa 10.4 and Mastercard 4837). The remaining chargebacks are various consumer dispute categories. Please see these pages on network exception codes: Visa, Mastercard, PULSE, Discover, and STAR.

What happens if a merchant has too many chargebacks?

If the merchant has too many chargebacks, they can be put in network monitoring programs. These network monitoring programs come with fees and remediation requirements. It is important to implement proper fraud controls to avoid ending up in a network monitoring program. Please read Network Monitoring Programs for more information.

Can we get a chargeback on an ACH debit?

The term chargeback is only used in reference to card transactions. However, an account holder can initiate a reversal of an ACH debit. Reversals of ACH debits are known as ACH returns. Unlike chargebacks, there is no dispute/representment process for an ACH return. Similar to network monitoring programs for excessive chargebacks, NACHA enforces limits on the ACH return rate. If a merchant exceeds NACHA’s return rate threshold, the merchant is at risk of being shut down. Please see the NACHA website on ACH return rate thresholds.

Is there a chargeback compelling evidence template?

Yes, please email [email protected]. We can provide a template and representment guide to assist in generating compelling evidence.

How do we determine that a chargeback is closed based on the daily chargeback and exception reports?

Please refer to the above chargeback status mapping chart. The sequence of status changes is different on different networks, so it is important to follow the status mapping guide before marking chargebacks as closed.

How should we modify our evidence based on exception code?

Compelling evidence should be customized to counter the chargeback reason code description. For example, compelling evidence for fraud chargebacks should show how you determined that the user was the true cardholder before allowing the transaction to proceed. The compelling evidence is a response to the chargeback, so the evidence should always match the chargeback reason code.

What tools should we use to block chargebacks from occurring?

A strong KYC process and proper fraud controls are the best ways to prevent chargebacks. Most chargebacks are fraud related. Please contact [email protected] if you have questions on which fraud controls may be most relevant for the type of activity you support. We also have a Fraud in Payments guide we would be happy to share, upon request.

For which transaction types can chargebacks be submitted?

Chargebacks can technically be opened on both disbursement and purchase transactions. However, disbursement chargebacks almost never occur because cardholders do not typically dispute an incoming credit even if they do not recognize the source of the credit. Chargebacks are often associated with account funding transactions (AFT), but they occur on all types of purchase transactions such as loan repayment and peer-to-peer transactions.