A chargeback is when a cardholder (the customer) contacts their issuing bank to question a charge or reverse a transaction. Comparatively, if the customer completes a transaction through a payment channel like PayPal, they can attempt to reverse the charge through a dispute. A chargeback or dispute can result from fraud, an unrecognized charge, a defective product, or a failure to receive a service or good.

Chargebacks and disputes can consume profits, time, and resources. A supplier that has a high chargeback rate can expect:

• Money out the window: You lose the sale and the product (especially with fraud), and get hit with non-refundable chargeback fees.
• Card network troubles: Mastercard and Visa are watching! If your chargebacks are too high, you could face hefty fines, audits, and even lose the ability to process card payments entirely.
• A strain on business: If rates are too high, customers and financial partners won't trust you as much. Plus, dealing with chargebacks is a significant time and resource drain for your team.

Prevention strategies, proper and timely responses, and effective management practices can help you resolve disputes smoothly and maintain positive customer relationships.

How does Reach help?

Reach's role in the chargeback and dispute process

As the Merchant of Record (MoR), Reach is the legal party responsible for the transaction. As your intermediary with payment networks, Reach handles the chargeback process on your behalf. We’ll ensure you’re notified of any chargebacks and manage the submission of your defense material within the stipulated representment window. Furthermore, we’ll provide strategic insights to help you refine your representment, ultimately boosting your likelihood of a successful dispute outcome.

How will you be notified of a chargeback?

Chargeback and dispute notifications

Reach is notified of a chargeback or dispute, then sends the supplier a chargeback notification via email. All communications regarding the case will take place in the same email thread as the initial notification.

The notification contains all the necessary details to understand the case, such as:

• Case & order IDs: Case number, order number, and merchant ID.
• Transaction details: Transaction date, transaction amount, and chargeback amount.
• Customer Information: The customer's name, email, and payment method.
• Dispute rationale: Reason for chargeback and the chargeback reason code.
• Deadlines: The date the case was received and the Reply Due Date.

The supplier must respond to the notification before the indicated Reply Due Date, whether they accept the case or intend to fight the chargeback.

Key terms

Chargebacks and disputes can be confusing, but understanding the terms and parties involved in the process can help you effectively navigate cases and ensure good communication among everyone involved.