Chase Chargeback Guide for Merchants in 2024

As someone who sold online, I researched most banks to know how they deal with chargeback disputes.

Chase is one of the bigger players. Thus, I wanted to talk about them in this guide.

I’ll explain how Chase handles chargebacks and ways that merchants fight them and can prevent them.

Let’s see how Chase handles these.

Key Takeaways

• The chargeback process will vary by card network.
• Chargeback fees will vary by card network or payment processor (not Chase).
• Chase gives customers 60 days from the transaction date to file a chargeback.
• The process typically lasts 30 to 60 days.
• Reason codes will vary by card network.

How Are JPMorgan Chase Chargebacks Different?

Chase will become the acquirer if you use Chase for Business and accept payments with their payment processor. This party will represent you during the chargeback process. And you’ll deal with chargebacks through Chase’s dispute management platform.

When Chase (JPMorgan) is the issuer, or customer’s bank, the process varies by the card network involved.

Here’s an example.

Chargebacks done on Discover transactions will involve Retrieval Requests — when the issuer requests information before doing a chargeback. Visa doesn’t offer merchants such a luxury.

Chase is known as the issuing bank in a chargeback. This means they do the following:

• Receives dispute from cardholder.
• Reviews evidence from both sides.
• Decides to uphold or reverse chargeback.
• Communicates decision to all parties.
• May represent cardholder in arbitration.

The chargeback fee will depend on the merchant’s payment processor. For instance, if a merchant uses Amazon as a processor, they’ll need to pay a $20 Chargeback Dispute fee. Chase won’t charge a specific chargeback fee to the merchant.

Fees will range from $25 to $100 per chargeback.

Summary: Chase doesn’t have a specific chargeback process. It varies by bank.

Chase Chargeback Management System

Chase's Chargeback Management System is a hub where you can track, manage, and resolve disputes related to customer transactions.

Here's what it offers:

• Overview of all your chargebacks in one placesome text
  • Makes it easier to identify trends.
• Chargeback data, including reason codes, transaction details, and customer information.
• Send evidence to Chase.
• Communicate directly with Chase through the platform to facilitate faster resolution.

These features make managing chargebacks much easier. Though, card networks (e.g., Visa), have their own versions of chargeback management platforms. 

Summary: Chargeback Management System Chase’s solution for chargeback management.

Time Limits for Sellers & Cardholders

• Dispute a Transaction (Customer): 60 days from the transaction date
• Respond to a Chargeback:some text
  • Discover: 5 dayssome text
    • Retrieval requests: 20 days
  • American Express: 20 days for inquiries and chargebacks
  • Mastercard: 45 dayssome text
    • Second chargeback: 30 days
  • Visa: 20 days

Your payment processor will let you know how long you must reply to a dispute or a retrieval request. Respond within their time limit. Otherwise, you’ll automatically lose the dispute.

JPMorgan Chargeback Process

• How Long Will it Last: 30 to 60 days (or more)
• Parties involved:some text
  • Chase and possibly card brand (e.g., Visa): Known as issuer
  • Cardholder
  • Merchant’s payment processor (e.g., PayPal): Known as acquirer
  • Merchant

The actual chargeback process will vary by the card provider.

But here’s what it looks like (in general) [1]:

1. Customer identifies the unauthorized or incorrect transaction.
2. They contact Chase customer service and report the transaction.
3. Chase reviews and processes the chargeback.
4. Temporary credit applied to the buyer's account.
5. Merchant responds to the chargeback claim.
6. Chase evaluates the merchant’s response.
7. Final decision made on the chargeback.
8. Credit is confirmed or reversed.

In some cases, the merchant or the customer could dispute Chase’s results (pre-arbitration). Or a customer could file a second chargeback. Then, the cycle would repeat. Again, this depends on the card provider.

If Chase is the acquirer, they will represent you during the process. You will give them your information, and they will give it to the issuer.

Chase Chargeback Reason Codes

Chargeback reason codes are specific codes the card issuer (bank) provides during a chargeback dispute. They categorize why a cardholder is disputing a transaction and requesting a refund.

Such reason codes also help determine what evidence you’ll need to fight a transaction.

The actual reasons for a chargeback will vary by reason code. These codes differ by provider:

• Visa
• Mastercard
• Discover/JCB
• American Express

JCB transactions done using USD as the currency follow Discover’s reason codes [2].

Knowing every reason code for each major card provider will help you understand what to do to prevent chargebacks. Because you’ll just need to do the opposite of what triggers those reason codes.

In most cases (for instance, merchant error) that statement is true. But fraud-related codes are trickier to prevent. I’ll talk about some steps you can take, later.

Summary: Chargeback reason codes will vary by card provider.

What ARE Chargebacks?

“Chase chargebacks” are the same as other chargebacks.

A chargeback is a consumer protection tool that allows cardholders to dispute a transaction. The goal of this request is to reverse the funds.

This occurs when:

• The transaction is unauthorized
• Merchant did something wrong during transaction
• Goods/services were not received as expected.

The issuer investigates the claim. If valid, returns the funds to the cardholder and debits the merchant’s account.

Then there are debit card (Regulation E) and credit card (Regulation Z) chargebacks.

Regulation E governs electronic fund transfers, primarily for debit cards. It ensures protection against unauthorized transactions. From there, financial institutions (in this case, Chase) must investigate and resolve disputes.

Regulation Z applies to credit card transactions under the Truth in Lending Act. It provides similar protections but focuses on credit transactions. It requires creditors to resolve billing errors. It also includes protections for credit card billing disputes and unauthorized charges.

Summary: Chargebacks are forced reversals of funds that are meant to protect consumers.

How’s This Any Different From a Refund?

Refunds and chargebacks result in customers getting their money back. They differ in how they're initiated and the consequences for sellers.

Refunds are voluntary repayments initiated by the seller, usually after a customer returns an item or expresses dissatisfaction.

Chargebacks are forced transaction reversals initiated by the customer's bank. This happens when a cardholder disputes a charge on their statement. They often come from fraud, unauthorized transactions, or dissatisfaction with the product or service.

Chargebacks come with chargeback fees — additional fees — and can get the merchant stuck in dispute monitoring programs, which come with review fees that cost tens of thousands of dollars.

Summary: Refunds are a customer service tool for sellers, while chargebacks are a consumer protection mechanism.

Types of Chase Chargebacks

Here are the main categories of chargebacks:

• Friendly Fraud/Chargeback Fraud: Legitimate customer disputes valid transactions.
• Merchant Error: Mistakes by the merchant cause customer dissatisfaction.
• Third-Party Fraud: Unauthorized use of card details for fraudulent purchase.

Friendly fraud (AKA first-party fraud) occurs when customers initiate chargebacks for purchases they made but later regret or do not recognize. It’s a form of chargeback fraud. This can be intentional or accidental. For instance, customers may forget about a subscription and dispute it as fraud.

More than 86% of chargebacks result from friendly fraud [3].

Merchant errors include incorrect billing, shipping delays, or product description discrepancies. For example, a customer may file a dispute if they received a damaged item.

Third-party fraud (or true fraud) involves unauthorized use of card information. Fraudsters obtain card details through phishing or data breaches and make purchases without the cardholder's consent.

The actual reasons for a chargeback dispute will depend on the reason code.

Summary: The main types of chargebacks are friendly fraud, merchant error, and third-party fraud.

How to Prevent Chase Chargebacks

Here are ways that I recommend avoiding Chase chargebacks:

• Provide clear product descriptions and images.
• Have a transparent refund and return policy.
• Obtain authorization for the correct transaction amount.
• Use a recognizable business name on statements.
• Communicate effectively with customers.
• Ship products promptly with tracking information.
• Keep accurate records of all transactions.
• Provide requested information for retrieval requests.
• Stay on top of fraud prevention.
• Use chargeback alert software.

There’s nothing special here.

Since Chase chargebacks are the same as other disputes, there aren’t special measures you need to follow to prevent them. We list various ways (in more depth) you can avoid chargebacks in a separate piece.

One of the better ways to protect yourself from disputes is to use chargeback alerts. These notify you when a customer has an issue through an alert provider (e.g., Visa RDR). This gives you a chance to fix the problem before it escalates to a chargeback.

You’ll need coverage for all card networks, though. For instance, Ethoca works with some Visa transactions and primarily Mastercard. And it’s a pain to set all those alerts up. We make that process easier. Learn how.

Otherwise.

Use fraud scoring software to gauge whether transactions are legitimate. It'll let you know if it notices red flags (e.g., ordering from a vacant property). Giving you a chance to cancel the order and prevent it from becoming fraud.

And you don’t want fraud-related chargebacks. Merchants win a little over 9% of those [4]. Much lower than the industry average win rate of 30%.

If you’re facing a lot of chargebacks, consider a chargeback analyst. They’ll review your data and help you adjust to prevent more chargebacks.

Summary: Be transparent with customers and reduce the number of errors you make.

How Do I Fight & Win Chase Chargebacks?

First, should you fight a chargeback?

Weigh the cost of fighting a chargeback against potential recovery.

Consider these points:

• Transaction Amount: Low-value transactions may not justify the costs of fighting.
• Chargeback Fees: Factor in fees from banks and payment processors when disputing.
• Time Investment: Evaluate the staff time required for gathering evidence and responses.
• Evidence Availability: Strong evidence increases the likelihood of winning a dispute.

If the evidence strongly supports the transaction's validity and the amount justifies the effort, contest it. Accept the chargeback if the cost outweighs potential recovery or the evidence is weak.

Analyze chargeback trends to identify recurring issues and implement preventive measures. Again, if your chargeback rate is over 1%, hire a chargeback analyst for this task.

If you fight the chargeback, put together your representment package. This includes evidence, requested documents, and a rebuttal letter.

A rebuttal letter is a merchant's formal response to a chargeback dispute.

When writing one, include the following to increase the chances of winning:

• Clearly state the reason code being disputed.
• Provide concise evidence contradicting the cardholder's claim.
• Reference any supporting documentation such as proof of delivery.

The evidence you’ll provide varies by reason code. Though, Chase does list the specifics of what you’ll need (e.g., file side and format) to submit evidence for each cardholder.

They also mention that you should keep documentation of your transactions’ documents for this many months with each network:

• Visa: Minimum 13 months
• MasterCard: Minimum 13 months
• Discover: Minimum 36 months

Having such documentation allows you to respond to retrieval requests — where Chase asks for information. And it’ll improve your odds of an inquiry not escalating to a chargeback. It’ll also help ensure you have sufficient evidence during a chargeback dispute.

Discover has such a long time frame because it has a chargeback reason code known as Good Faith Investigation. This code allows customers to file chargebacks from years ago. It’s usually used in case customers don’t detect fraud until years later.

Summary: Only contest a chargeback if it’s worth fighting. And if you fight one, submit the most evidence possible.

FAQs

How Do You File a Chargeback With Chase (As a Customer)?

Log into your Chase account, select your card, search for the transaction in question, click at the far right side of the transaction, click/tap Dispute Transaction, and follow their instructions to begin a dispute (AKA chargeback). Watch this video for help on filing a claim.

Conclusion

The chargeback process, evidence required, reason codes, etc. for Chase depends on the card provider the order is for. Thus, you’ll need to build your chargeback prevention strategy around all those reason codes.

One way to improve your chargeback resilience is to use dispute alerts. These will let you know when a transaction could become a chargeback. We offer these alerts. Learn how they can help you reduce disputes.

Sources

• Chase Merchant Services. What Can You Expect When You Get a Dispute
• Chase Merchant Services, last updated in 2021. Chargeback Reason Code User Guide (PDF)
• LinkedIn. Friendly Fraud on the Rise in B2B Payments
• Chargeflow, 2024. Navigating eCommerce Resilience: Insights from Chargeflow’s 2024 Chargeback Report