7+ Reasons Chargebacks Get Denied & What To Do

I’ve never had to file a chargeback, but I understand how frustrating billing disputes can be. Unexpected charges or unhelpful merchants can make anyone feel stuck.

In this post, I’ll cover why chargebacks get denied, common mistakes to avoid, and how the process works.

Let’s start with whether issuers can deny chargebacks.

Key Takeaways

• Filing a chargeback late will be denied automatically.
• Most deadlines are 120 days, but this depends on the card network.
• Filing fake chargebacks can mean fines up to $10,000 or jail time.
• Winning a chargeback needs strong proof that matches the dispute reason.
• Disputes for international purchases are harder due to different laws.

Can a Chargeback be Denied?

Merchants cannot block chargebacks, but banks and card issuers can. They reject claims if cardholders lack evidence, break rules, or misuse the dispute process. The outcome depends on how well your case fits the issuer’s guidelines.

Merchants don’t decide the result, but they can fight disputes by submitting evidence. If their evidence is stronger, the issuer will favor them. That’s why it’s vital to provide clear, solid proof when filing a chargeback.

Issuers also follow strict timelines and rules. Missing a deadline or choosing the wrong dispute reason can result in an automatic denial. To prevent this, make sure your case is accurate and submitted on time.

Now, let’s look at some of these reasons.

Summary: Yes.

Here’s Why Chargebacks Get Denied By Banks & Card Companies

Here are some common reasons why your dispute request might be denied:

• Lack of proof: You didn’t provide enough evidence.
• Wrong dispute reason: The reason you selected doesn’t match the issue with the transaction.
• Merchant provided enough proof: The seller’s evidence was stronger.
• Buyer’s remorse: Disputes based on regret, not real issues.
• Filed too late: You missed the filing deadline.
• No merchant communication: You didn’t try to resolve the issue directly with the seller first.
• Foreign transactions: Purchases in certain countries may not qualify for chargebacks.
• Didn’t follow issuer’s rules: You failed to meet the issuer’s requirements.
• Suspected fraud: The issuer believes the chargeback itself may be fraudulent.

While there are other possible reasons, these are the most common. Knowing these can help you avoid errors when disputing a charge.

In the next sections, we’ll dive deeper into each reason.

Let’s start with the most common one.

1. Lack of Proof

Chargebacks are often denied because cardholders don’t provide enough evidence. Sometimes, 34% of chargebacks involve fraudulent transactions [1]. This shows how important it is to back up your claim with solid proof.

Banks and issuers need evidence to confirm that disputes are valid. Without clear documentation, it’s very hard to win your case.

For instance, say you dispute an unauthorized online purchase but provide no evidence. The merchant might respond with proof of delivery to your address. 

Without documents to challenge this, the issuer will likely side with the merchant.

Evidence is key to proving a transaction was unauthorized or violated terms. Useful examples include:

Receipts

Screenshots of chats

Photos of faulty product

Copy of cancellation request

Credit card statement showing the charge

Any other relevant documentation

Evidence of non-delivery

When filing a chargeback, you must provide all necessary details. Issuers won’t investigate for you — they only review what you submit. The stronger your evidence, the higher your chances of success.

Another common issue? Choosing the wrong dispute reason.

2. Wrong Dispute Reason

Each dispute reason must follow specific rules set by the card network or issuer. If your claim doesn’t match the selected reason, the bank may reject it immediately.

For example, if you choose "fraudulent transaction" for a product that arrived damaged, it misrepresents the issue.

The bank would investigate for unauthorized use, ignoring the real problem.

Misusing dispute reasons can also lead to friendly fraud. This happens when legitimate transactions are disputed as fraud. Either by mistake or on purpose.

Friendly fraud causes over 70% of chargebacks and costs businesses billions every year [2]. To avoid this, pick a reason that matches your case. Review all available options and their definitions carefully before filing.

Choosing the right reason ensures your claim is processed correctly and increases your chances of success.

What if you had the right reason and submitted a lot of evidence?

3. Merchant Provided Sufficient Proof

Merchants can fight disputes by submitting strong evidence to prove the transaction was valid. If their evidence is stronger than the cardholder’s claim, the bank or issuer will side with the merchant.

Sellers often challenge chargebacks when they believe the claims are baseless.

Research from Javelin shows that merchants contest about 43% of chargebacks and win 60% of those cases [3]. This means merchants succeed most of the time when they defend their claims with solid proof that matches the dispute reason.

However:

Win rates vary by chargeback type. In general, merchants win about 30% of cases across industries.

We cover merchant win rates in more detail in another guide you can check out.

You probably want an example of merchants providing sufficient proof.

A seller disputes a chargeback by submitting receipts, delivery confirmations, or communication logs. These prove the purchase was legitimate. If their evidence is stronger than yours, the bank will deny your chargeback.

To improve your chances, make sure your case includes clear and complete evidence. The stronger your proof, the harder it will be for a merchant to successfully challenge your claim.

Want to boost your chances of winning a dispute? We have a separate guide just for that.

But you definitely won’t win if your chargeback was for the next reason. Let’s look at it.

4. You Had Buyer’s Remorse

Chargebacks aren’t meant to address buyer’s remorse, and such claims are usually denied. Buyer’s remorse happens when you regret a purchase. Though the transaction was valid and the product or service matched its description.

Filing a chargeback for this reason doesn’t qualify as a legitimate dispute.

For instance, realizing you overpaid for an item or no longer want it isn’t a valid reason for a chargeback.

Banks and issuers focus on whether the transaction broke terms of sale or was unauthorized. If your claim is based on dissatisfaction rather than a real issue, it will likely be rejected.

If you’re unhappy with a purchase, it’s better to contact the merchant directly. Many businesses allow returns, refunds, or exchanges for unsatisfied customers.

Filing a chargeback for buyer’s remorse wastes time and can harm your credibility with the bank. We’ll discuss the “credit” part later on.

Was it not buyer’s remorse? Then maybe the problem was being too late.

5. You Filed Too Late

Filing a chargeback after the allowed time frame always results in denial. Each card network has specific deadlines for disputing transactions.

If you miss these deadlines, you lose the right to a chargeback.

Here are the typical time limits for major card networks:

• Visa: Up to 120 days from the transaction date.
• Mastercard: Generally 120 days, varying by dispute type.
• American Express: Typically 120 days, but can vary; check your cardholder agreement.
• Discover: Usually 120 days from the purchase date.

Discover’s "Good Faith Investigation" lets you challenge charges up to 2 years old. However. This doesn’t guarantee a win. The issuer still reviews the claim’s validity.

To avoid missing deadlines, check your statements regularly. Act quickly if you find any unauthorized or incorrect charges.

And before you file a chargeback…

6. Didn’t Attempt to Communicate With the Merchant

Issuers may deny chargebacks if you don’t try to resolve the issue with the merchant first. While issuers don’t always require proof of contact, skipping this step can weaken your case.

It might suggest the issue could have been resolved without filing a dispute.

For example, if a product is defective, the merchant might have been willing to replace the item. But if you didn’t contact them, you missed that opportunity.

Even worse, if you rejected a fair solution offered by the merchant, the issuer may consider your claim invalid.

Reaching out to the merchant shows you acted in good faith to resolve the problem. Save any records of your attempts, like emails or chat logs. These can support your case if you later need to file a chargeback.

Here’s a curveball.

7. You Bought a Product in Overseas

International transactions often follow different:

• Consumer protection laws
• Card network rules
• Merchant policies

Such factors can complicate the process and lead to denials.

Issuers may expect you to first resolve the issue under these local laws before filing a chargeback. Skipping this step could make your dispute invalid.

Cross-border transactions also come with extra challenges. These include currency conversion issues and differences in business practices.

Speaking of rules and laws.

8. Did Not Follow the Issuers’ Rules

Each card issuer has its own procedures, requirements, and timelines for handling disputes. If you don’t follow these guidelines, your chargeback is likely to be denied.

For example, issuers often require detailed evidence and the correct dispute reason code.

Some issuers also have specific policies. Like requiring you to fill out forms.

To improve your chances, review your issuer’s chargeback policies before filing.

And don’t commit chargeback fraud.

9. Suspected Chargeback Fraud

Chargeback fraud happens when a cardholder disputes a legitimate charge without a valid reason. This is also known as friendly fraud.

Issuers carefully review claims for signs of abuse. If you frequently disputed similar charges without evidence, the issuer may flag their behavior.

Merchants can also report suspected fraud and provide proof to counter the claim, which may lead to the cardholder losing the dispute.

To avoid suspicion, make sure your disputes are genuine, backed by clear evidence, and follow the chargeback rules.

Now that we’ve covered the reasons for denial. Let’s look at what you should do if your chargeback is denied.

What to Do if Your Chargeback Request is Denied

If your chargeback is denied, there may still be steps you can take. First, review the denial notice from your issuer. It will explain why the chargeback was rejected and whether an appeal is possible.

In some cases, you can request a second review by submitting more evidence or clarifying your original claim. This option is usually only available if the chargeback hasn’t reached its final stage.

Once the decision is final, further appeals are typically not allowed.

If the dispute isn’t resolved, consider reaching out to the merchant. They might be open to negotiating a refund or another solution. Many merchants prefer to resolve issues without involving the chargeback system.

Knowing the chargeback process, including its stages and key decision points, can help you handle disputes.

In the next section, we’ll break down how the chargeback process works.

How Are Chargebacks Handled?

The chargeback process involves multiple steps to settle disputes between cardholders and merchants. While the steps are similar across issuers, specific rules depend on the card network and payment processor.

Here’s how the process usually works:

1. Pre-dispute

The process starts when you contact your bank or card issuer to dispute a charge. You’ll need to explain why you believe the charge is invalid and provide any supporting documents.

Some merchants use tools like chargeback alerts. These notify them of a potential dispute before it escalates. In some cases, the merchant may issue a refund directly to avoid a chargeback.

2. Review

The issuer reviews your claim to ensure it meets basic requirements, such as filing within the deadline. If the claim is valid, the issuer forwards it to the merchant’s bank (the acquirer) for further review.

3. Merchant Response

The merchant can accept the chargeback or fight it by submitting evidence that the transaction was legitimate. This may include receipts, delivery confirmations, or records of communication with you.

4. Evaluation & Decision

The issuer reviews the merchant’s response along with your original claim. If the merchant’s evidence is stronger than yours, they will deny the chargeback.

5. Appeals or Arbitration

In some cases, either party can appeal the decision. This involves a deeper review, and sometimes arbitration through the card network.

Arbitration is the final step in the process. It can result in more costs for both parties.

The chargeback process in general varies by provider.

For instance, American Express has 2 processes:

• Request for Information: Merchants can submit their case before it becomes a formal chargeback.
• Upfront Chargeback: A chargeback is initiated immediately in certain situations.

For a deeper dive into the chargeback process and tips to strengthen your case, check out our detailed guide. It covers each stage step-by-step to help you navigate disputes effectively.

Before starting the process, though, it’s important to understand the legal aspects of chargebacks.

Legal Implications of Fraudulent Chargebacks

Filing legitimate chargebacks is your legal right under the Fair Credit Billing Act (FCBA). This law protects consumers from unfair billing practices and allows disputes for valid reasons like fraud, unauthorized charges, or defective products.

But:

Filing false disputes — known as chargeback fraud — is a crime with serious consequences.

Fraudulent chargebacks are treated like theft. By claiming an illegitimate refund, you’re taking goods or services without paying for them.

Most states impose fines between $1,000 and $10,000 for chargeback fraud. Oh, and there’s possible imprisonment of 1 – 3 years. The punishment depends on the amount of money involved and the case’s details.

In extreme cases, fraudulent chargebacks can result in charges like wire fraud, bank fraud, or grand theft. For instance, a man in Pennsylvania caused $650,000 in losses through fraudulent disputes. He now faces up to 20 years in prison.

Proving chargeback fraud can be difficult because intent must be shown. However. When evidence is strong, offenders face criminal and financial penalties.

Will filing chargebacks affect your credit score?

Do Chargebacks Affect Your Credit Score?

Filing a chargeback typically won’t affect your credit score directly. If you file repeated or questionable disputes, it could indirectly impact your financial standing. Issuers may flag your account or restrict your ability to file future disputes.

In more severe cases, they could close your account. This could harm your credit utilization ratio, which in turn might negatively affect your credit score.

And that’s a wrap.

Wrapping Up

Chargebacks are a serious process, but some people misuse them. Sometimes intentionally. Other times, by mistake. Over time, banks and card issuers have tightened their policies to prevent abuse.

If you file a chargeback for a legitimate issue where the merchant was at fault, it shouldn’t be denied.

However. It’s important to understand the process before filing. Start by reading our guide on what a chargeback is.

Sources

• [1] Chargeback statistics. Clearly Payments.
• [2] What is friendly fraud? Mastercard. 1/24/2024.
• [3] Questions Merchants Ask Most Often. Ethoca.