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What is a chargeback?


A chargeback is a transaction that has been disputed by a customer. Chargebacks occur for a variety of reasons. For example, the customer may be unsatisfied with the merchandise, or a criminal may have made fraudulent use of their credit card number. When a customer disputes a charge, you receive a chargeback notice, and the amount of the original transaction is credited to the customer's account, and debited from yours. (In other words the transaction is "charged back" to you.) You have a right to challenge the chargeback by sending in a rebuttal. Intuit works hard to fight chargebacks on your behalf. To assist us, please respond promptly and file requested paperwork by the submission deadline.

If you have received a chargeback, DO NOT issue a credit to the cardholder. The cardholder has received credit from their bank upon the processing of the chargeback.

Chargebacks can be painful. Be aware of the most common reasons for chargebacks and take every precaution to guard against them.

  • The cardholder claims they didn't get the merchandise or services.
  • The cardholder claims that the merchandise or services received were not as initially described or were received in defective condition.
  • The cardholder claims that the transaction was canceled and/or the merchandise was returned.
  • The cardholder does not recognize the transaction
  • The cardholder claims fraud or unauthorized charge.
  • Duplicate transactions.
  • Your failure to respond to a retrieval request (initial inquiry from the bank that issued your customer's card) on time.


Fee Note: Even if you work with Intuit to successfully reverse a chargeback, you still must pay a chargeback fee. The chargeback fee isn’t a penalty fee. It's a processing fee for handling this issue on your behalf.

How chargeback disputes work

Here's the basic process:

If you wish to challenge a chargeback, you MUST do so on time. Notices you receive include specific instructions and deadlines for your response. Usually, you must respond within 15 days from the date of the debit to your checking account. Failure to do so may forfeit your right to receive credit to your account.

A chargeback comes directly from the cardholder's bank. Intuit is unaware of a dispute until the chargeback is processed. Your customer is usually not required to notify you of their dispute prior to contacting their bank, nor is a retrieval request required prior to the processing of a chargeback.

How to reduce chargebacks

For Visa

  • Obtain a card imprint (either manual or electronic) and the cardholder's signature for every transaction, if possible. This is the only proof accepted by MasterCard and Visa that the authorized owner of the account number being provided engaged the transaction. The card imprint and the cardholder signature prove that both the physical credit card and the cardholder were present during the transaction. All non-face-to-face transactions such as mail order, telephone order, and electronic commerce transactions present a high risk of chargebacks for which there is minimal recourse available to the merchant.
  • Use Address Verification Service (AVS) for all non-face-to-face transactions. AVS will verify that the address the customer is providing is also the billing address of the account number being used. Although this is not a guarantee against chargebacks for unauthorized usage, it can deter some fraudsters. AVS is also a requirement for all non-face-to-face transactions to obtain the best possible discount rate for the transaction.
  • Check all security features on the credit card for face to face transactions as well as the cardholder's signature on the back panel against the signature on the sales draft. If the transaction involves suspicious or unusual circumstances, call the voice authorization center and request a "Code 10" authorization. Do not complete a transaction if you suspect that the card is fraudulent and/or the customer is not the authorized owner of the card.
  • Include your return/cancellation policy on the sales draft or other sales receipt signed by the cardholder. It must be on the signed receipt to be considered valid notification by MasterCard and Visa. Include any restocking and/or cancellation fees. Policies posted on Internet sites, distributed in shipment boxes, verbally delivered during telephone orders, and/or sign posted in retail locations are not considered valid notification and may be subject to chargeback.
  • Do not process a transaction for billing to the cardholder's account until the merchandise has been shipped and/or services have been received. You may obtain an authorization to ensure that the account number is valid and funds are available. Later, when you deliver the product or service, capture those funds to complete the sale.
  • Obtain signed proof of delivery for merchandise that is shipped to the customer. Should a customer dispute a transaction claiming that the merchandise was not received, only shipment tracers that are signed by the customer are considered valid evidence that a customer did indeed receive the merchandise in question.
  • Obtain a positive authorization response for all transactions. Do not complete transactions when you get a "decline" response for a card or have not completed an authorization request. This may result in a chargeback for which you have no recourse.
  • Capture funds within 5 days from the date a positive authorization is received. After 5 days the authorization number is no longer valid.
  • Do not ever run your personal credit card through your machine to obtain cash for yourself or any other person. This is considered fraudulent card activity and can result in the closing of your merchant account with MasterCard and Visa.
  • Refer to you Merchant Agreement for complete information on accepting credit card transactions.


For MasterCard

  • If the products or services purchased are not available at time of the Transaction, the Merchant must inform the Cardholder and obtain the Cardholder’s agreement to a delayed delivery (specifying the anticipated delivery date) before proceeding with the Transaction.
  • The Merchant must advise the Cardholder if the products or services ordered will not be delivered within the time frame originally disclosed to and agreed with the Cardholder. The Cardholder must be notified of the new anticipated delivery timeframe and given an opportunity to cancel the Transaction.
How to respond to a chargeback

Follow the instructions in the letter you get.
Chargeback or Retrieval Request notices include detailed instructions as well as the fax number and email address where you should send your response. Failure to follow these instructions may delay the process.
Always follow the specific instructions you receive. But here's some additional chargeback contact information

• MC/VISA Chargeback/Retrieval Responses
• FAX (818) 436-8988 cb@intuit.com

• AMEX One Point Chargeback/Inquiries
• FAX (402) 933-1865

• AMEX Direct Chargeback/Inquiries
• FAX (818) 436-8988 cb@intuit.com

• VISA Pre-Arbitration
• Fax (972) 534-1847 pre-arbitration@intuit.com

• Pin debit card disputes
• Fax (866)-288-0765 Pindebitcb@intuit.com


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