Unfortunately, chargebacks are a standard part of doing business—especially if you accept payments online. There are a number of things you can do to reduce chargebacks, but first, it’s important to know what happens behind the scenes.

  1. A customer disputes a transaction (issues a chargeback) with their bank
  2. The transaction amount is debited from the merchant and goes back to the customer’s bank account
  3. The merchant is notified of the chargeback and can choose to either accept the chargeback or dispute it with documentation showing that the transaction was legitimate
  4. If the merchant wins the case, the transaction amount will be returned to their bank account; if the merchant loses or accepts the chargeback, the customer will keep the funds

A retrieval is also issued by the customer, but it is just a request for information about an unidentifiable charge. In the event of a retrieval, funds are not removed from the merchant's bank account. The merchant is notified of the retrieval request and they can then respond with the requested information.

A pre-arbitration, or pre-arb, happens when a chargeback is filed, the merchant wins, and then the customer disputes the charge for a second time. While you can dispute pre-arbs, it's been our experience that merchants rarely win these cases without the introduction of new and compelling evidence.

note

Regardless of the final outcome, the bank that manages the chargeback, retrieval, or pre-arb will often charge a fee. The fee amount varies depending on your account setup and where your business is domiciled. Contact our Support team with any questions.

Preventing chargebacks and retrievals

There are a few best practices that can help lower the number of chargebacks and retrievals issued against your account:

  • Collect as much customer information as possible with each transaction. The billing street address, billing postal code, and the CVV are particularly important.
  • Use Braintree’s Fraud Tools. We offer varying levels of fraud protection to meet your business’s needs; see the fraud tools guide for more information.
  • Be upfront with your customers. Make sure that your Terms of Service and refund policy are easy to find and understand.
  • Be accessible. Make it easy for your customers to contact you if they have questions or issues. We recommend that you clearly display your contact information on each page of your website.
  • Make sure your descriptor is clear. Your descriptor controls the way that your company name appears on your customer’s bank statements. Make sure that this clearly identifies your company and gives them contact information in case they need to get in touch with you. If you are unsure how your descriptor appears on your customers’ bank statements, contact us for more information.

You can find more tips and suggestions in our blog post about reducing chargebacks.

Disputing chargebacks

If one of your customers issues a chargeback through their bank, it is possible to dispute it and win back the funds. How we notify you about chargebacks and how you can actually dispute them depends on your account setup. Contact our Accounts team to find out more.

To dispute a PayPal chargeback, log into PayPal console and navigate to the PayPal Resolution Center. Learn more about PayPal disputes.

Still have questions?

If you can’t find an answer, contact our Support team.


← Back to Previous Page