What Is a Chargeback and Why Should You Care?

Chargebacks are meant to protect customers, but they often punish honest merchants. When a customer disputes a charge, their bank may forcibly reverse the payment, pulling money from your account without warning. And that’s just the beginning. Fees, penalties, and increased fraud risk follow. For e-commerce brands, a chargeback isn’t just a refund. It’s lost revenue, added labor, and a hit to your payment reputation - but here's the good news: if you understand how chargebacks work and respond effectively, you can win them. And if you're using Verdivo, that entire process becomes automated and stress-free.

The Chargeback Lifecycle: Step by Step

1. The Transaction

2. The Dispute

3. Temporary Refund

4. The Representment Process

5. Bank Review and Decision

Now let's break this down: How do you Improve Your Win Rate?

• Respond within 3–5 days.

• Use structured, bulleted evidence and a clear narrative

• Include your full refund policy and any customer interactions

• Automate your responses with tools like Verdivo

Why Most Merchants Fail at Chargebacks?

1. It’s time-consuming

2. The process is confusing

Pro Tip:

Know Your Reason Codes. Examples include Visa 10.4, Mastercard 4855, Amex C08. This will help you understand exactly what requirements the banks are looking for when it comes to chargeback responses.