What is a chargeback and how can I protect myself?

Cardholders have the right to dispute every transaction charged to their credit card. The burden of proof falls to the merchants. A cardholder may issue a chargeback up to 120 days after the sale date.

How do chargebacks work?

  • When a chargeback is issued, the Card scheme electronically screens the chargeback for technical criteria compliance. If appropriate, it forwards the chargeback to the merchant’s acquiring bank. The amount of the transaction disputed is deposited to the merchant account at his acquirer. Here is where the merchant chooses if they want to dispute the chargeback.
  • Then the Merchant must send the re-presentment documents to us at PAYMILL. We then check the documents with the help of our Acquirer (Acceptance, Wirecard or Credorax) and send it to the issuing bank of the end-customer who issued the chargeback.
  • The merchant must try and prove that the disputed transaction was valid. He must supply copy of sales draft, and any supporting documents that strengthen his claim. The Card scheme electronically screens re-presentment for technical criteria compliance. If appropriate,it then forwards re-presentment to card issuer.
  • If no agreement can be found, then the case goes to Arbitration. Arbitration Committee of the respective card scheme reviews all information/ documentation submitted by both parties. In most cases the decision of the Committee is final and must be accepted by both parties. The fees for the chargeback are paid by the losing party. In case of possible loss and the costs it encounters the merchants must take responsibility.

How much do chargebacks cost?

Acquiring bank handling fee:

  • EUR 18.75 for all cards

Additional card scheme fee per chargeback (dispute and handling fee): 

  • VISA charges EUR 12 per chargeback (applicable for non-3D-Secure transactions)
  • MasterCard charges EUR 15 per chargeback (independent of 3D-Secure)