Responding to chargebacks and inquiries

When a customer disputes a charge with their bank, you have the opportunity to present evidence supporting the validity of the transaction. A well-prepared response can help you recover the disputed funds. The evidence you submit varies depending on the type of dispute.

Chargebacks vs. inquiries

When a customer contacts their bank about a charge, the bank can initiate either a chargeback or an inquiry.

Comparison of chargebacks and inquiries
	Chargeback	Inquiry
What happens to your money:	The disputed amount and chargeback fee are withdrawn immediately.	No money is taken during the investigation.
If resolved in your favor:	The disputed amount and chargeback fee are returned.	No action is required.
If resolved in customer's favor:	You lose the disputed amount and chargeback fee.	The inquiry might escalate to a full chargeback.

When an inquiry or a chargeback is opened, the bank asks you for evidence, you submit your response, and the credit card company makes the final decision.

Shopify doesn't decide chargeback outcomes. The customer's bank and credit card company make a decision based on the evidence that you submit.

The chargeback process

Review the following process to help you prepare to manage chargebacks:

Customer disputes the charge: They contact their bank claiming an issue with the transaction.
Bank initiates chargeback: The disputed amount and a chargeback fee are withdrawn from your account.
You're notified: Shopify alerts you to the chargeback with a deadline to respond. If the issuer claim is available, then you can review it to understand why the dispute was opened.
Gather and submit evidence: You have limited time, usually 7-21 days, to build your response.
Credit card company reviews: This can take up to 75 days after you submit.
Decision is made:
- You win: Disputed amount and chargeback fee are returned.
- Partial win: Some of the disputed amount returned.
- Customer wins: You keep nothing. If the issuer response is available, then you can review it to understand why the bank ruled against you.

Learn more about issuer claims and issuer responses.

Considerations when managing a chargeback

Understanding key aspects of the chargeback process can help you manage disputes effectively and maintain your account in good standing. Review the following considerations:

Final decisions: After the bank or credit card company rules on a chargeback, there's no appeal process and the decision is final. Shopify doesn't make these decisions and can't overturn them.
Currency exchange: When a customer's payment method is in a different country than your store, the chargeback amount is subject to exchange rates. You might receive small adjustments to cover rate fluctuations. These are separate from the chargeback fee.
Chargeback rates: Keep your chargeback rate low. A high chargeback rate can affect your Shopify Payments store status and eligibility for features, such as the Shop app. Learn more about understanding your chargeback rate.

The inquiry process

Inquiries work similarly to chargebacks, but your money isn't taken during the investigation. The following process explains how an inquiry is managed:

Your customer disputes the charge: The customer contacts their bank with a question or concern.
Your customer's bank sends an inquiry: No funds are withdrawn from your account.
You're notified of the inquiry: Shopify alerts you with a deadline to respond.
You collect and submit evidence: This process is the same as when a chargeback is opened.
The credit card company reviews the inquiry: This usually takes 65-75 days, but might take longer.
The customer's bank makes a decision:
- Closed in your favor: No money is taken and the inquiry is closed.
- Closed in customer's favor: The inquiry might escalate to a full chargeback and the disputed amount and chargeback fee are debited from you.

Responding by dispute type

Chargebacks fall into one of seven categories. The evidence you submit varies between the different types of dispute.

Strong evidence improves your chances of success, but it doesn't guarantee that you win a chargeback. Banks have the discretion to rule in the customer's favor, even when you provide delivery confirmation or other compelling proof.

Credit not processed

A credit not processed dispute occurs when the customer expects a refund or credit that wasn't issued or hasn't appeared on their statement.

Review the following common scenarios for credit not processed disputes:

You agreed to a refund, but it wasn't processed.
A return was received, but the credit wasn't issued.
The refund was issued, but hasn't appeared yet due to a processing delay.

The following types of evidence demonstrate that the credit was issued or wasn't required:

Refund transaction record: If you issued the refund, then provide the transaction log with timestamps, amount, and confirmation number.
Bank or processor statement: Demonstrate when the refund was processed and that it matches the disputed charge.
Your refund policy: Include the terms the customer agreed to at checkout, highlighting relevant conditions.
Customer communications: Any emails or messages where you explained the refund status or policy.
Return tracking: If the dispute involves a return, then provide evidence of whether you received the returned item.

If you owe your customer a refund, then you can issue a refund from your Shopify admin. You might lose the chargeback, but issuing the refund demonstrates good customer service and can prevent future disputes.

Duplicate charge

A duplicate charge dispute occurs when the customer claims they were charged multiple times for the same purchase, or that they already paid using a different method.

Review the following common scenarios for duplicate charges:

A technical glitch caused duplicate processing.
The customer receives a pending authorization and a final charge that aren't actually duplicates.
The customer paid with another method and was also charged to their card.

The following types of evidence demonstrate that only one charge was processed:

Transaction logs: Demonstrate that only one charge was processed, or that multiple charges were processed for separate orders.
Order details comparison: If the charges are similar, then highlight differences such as order numbers, timestamps, and items. You can view the transaction timestamps on the order's timeline.
Pre-authorization explanation: If one charge was actually a temporary hold that cleared, then explain this with timestamps.
Receipts for each transaction: Demonstrate that each charge corresponds to a different purchase.
Refund confirmation: If a duplicate charge did occur and you already refunded it, then provide proof.

Fraudulent transaction

A fraudulent transaction dispute occurs when the customer claims they didn't authorize or participate in the transaction.

Review the following common scenarios for fraudulent transaction disputes:

A stolen card was used for an online purchase.
The customer doesn't recognize the charge on their statement.
A family member made the purchase without the cardholder's knowledge.

The following types of evidence demonstrate that the cardholder authorized the transaction:

AVS and CVV verification: Demonstrate that the billing address and security code matched the card on file.
Device and IP data: Demonstrate that the transaction came from a device or location consistent with the customer's previous orders.
3D Secure authentication: If the customer completed additional verification such as a one-time code, then provide this record.
Order history: Provide records of previous successful orders from the same customer, email, or shipping address.
Delivery confirmation: Proof that the order was shipped to and received at the customer's verified address.
Customer communications: Any messages from the customer acknowledging the order, such as confirmation emails opened or support inquiries about the order.

Fraud disputes can be resolved when you can demonstrate the legitimate cardholder placed the order. The strongest evidence includes matching addresses, consistent device or location data, and delivery confirmation to the billing address.

Product not received

A product not received dispute occurs when the customer claims they never received what they paid for.

Review the following common scenarios for product not received disputes:

The tracking information confirms delivery, but the customer says they didn't get it.
The shipment is delayed or lost in transit.
A digital product wasn't accessible.
A service wasn't rendered.

The evidence you need to submit varies depending on what type of product or service you provide.

Evidence requirements for product not received disputes by product type
Product type	Evidence to submit
Physical products	Tracking information: Carrier name, tracking number, and delivery status. Delivery confirmation: Proof of delivery, ideally with signature or photo. Shipping address verification: Demonstrate that the item was sent to the address provided at checkout. Carrier communication: Any delivery notifications sent to the customer.
Digital products	Access logs: Records showing the customer logged in, downloaded, or used the product. Delivery confirmation: Email with download link, license key, or access credentials. Usage timestamps: When and how the customer accessed the digital product.
Services	Appointment or booking records: Confirmation of scheduled service. Service completion proof: Work logs, check-in records, or signed completion forms. Customer acknowledgment: Any communication where the customer confirmed the service was performed.

Product unacceptable

A product unacceptable dispute occurs when the customer claims the product or service is defective, damaged, or significantly different from the information on your store.

Review the following common scenarios for product unacceptable disputes:

The item arrives damaged or broken.
The product doesn't match the listing description.
Service quality doesn't meet expectations.
The customer claims the product is counterfeit.

The following types of evidence demonstrate that the product met the described specifications:

Product listing at time of purchase: Screenshots or archived versions showing exactly what you advertised.
Order and fulfillment records: Records of what the customer ordered, what you shipped, and when you shipped the order.
Pre-shipment photos: Images of the item before shipping, including packaging and any serial numbers.
Quality control records: Inspection logs or testing results, if applicable.
Customer communications: Any messages where the customer described the issue, and your responses offering resolution.
Return policy and process: Your terms for returns and exchanges, showing the customer agreed to them.
Support ticket history: Record of any troubleshooting or resolution attempts.

Customers are expected to contact you before filing a dispute. If they went straight to their bank without giving you a chance to resolve the issue, then include evidence that they never reached out, and emphasize that you have a clear resolution process to manage this type of dispute.

Subscription canceled

A subscription canceled dispute occurs when the customer claims they were charged after canceling a subscription or recurring payment.

Review the following common scenarios for subscription canceled disputes:

The customer thought they canceled, but didn't complete the process.
The charge processed before the cancelation took effect.
The customer forgot about a free trial that converted to paid.
The cancelation request wasn't received or processed correctly.

The following types of evidence demonstrate that the subscription was active when charged:

Subscription agreement: Terms the customer accepted, including billing cycle and auto-renewal.
Cancelation policy: Your terms for how and when customers must cancel to avoid charges.
Cancelation records: If no cancelation request exists in your system, then provide evidence of this.
Usage logs: Evidence that the customer continued using the service after the disputed charge date.
Billing notifications: Renewal reminders or payment receipts sent before the charge.
Customer communications: Any messages about the subscription, especially if they asked about cancelation but didn't follow through.

If the customer canceled their subscription or recurring payment, then review your records. If they follow your cancelation process and are still charged, then consider issuing a refund.

General

A general dispute occurs when the customer disputes the transaction amount, claims a processing error, or raises an issue that doesn't fit other categories.

Review the following common scenarios for general disputes:

The charged amount differs from what the customer expects.
Currency conversion results in an unexpected total.
Additional fees such as tax, shipping, or tips that the customer doesn't anticipate.
The transaction is processed as the wrong type, such as debit instead of credit.

The following types of evidence demonstrate that the charged amount was correct:

Itemized receipt: Clear breakdown of base price, taxes, fees, tips, and any other charges.
Checkout confirmation: Screenshot or record of the final amount displayed before payment.
Pricing policy: Your terms for taxes, fees, currency conversion, or gratuities.
Exchange rate documentation: For international transactions, provide the rate used at time of processing.
Customer communications: Any pre-purchase messages confirming the price or explaining additional charges.
System logs: Transaction records showing the amount authorized and charged.

Understand your chargeback rate

Your chargeback rate is a key metric that card networks and payment processors use to evaluate your account. It's calculated by dividing the number of chargebacks you receive in a given month by the total number of chargeback-eligible transactions you process during that same month.

Types of chargeback rates

You can view the following chargeback rate metrics in the Analytics section of your Shopify admin:

Standard chargeback rate: The percentage of transactions that result in a chargeback. This rate is used to evaluate your account's standing and eligibility for features, such as the Shop app.
Chargeback rate including Rapid Dispute Resolution (RDR): This rate includes chargebacks that were automatically resolved through Rapid Dispute Resolution (RDR) in addition to standard disputes. This metric helps you understand your total chargeback exposure and is relevant for Visa Acquirer Monitoring Program (VAMP) remediation.

View your chargeback rate

You can track your chargeback rate in the Chargeback rate reporting view, in the Analytics section of your Shopify admin. The report includes both the standard chargeback rate and the rate that includes RDR chargebacks.

Keep your chargeback rate low

A high chargeback rate can affect your Shopify Payments account status and eligibility for features. Card networks such as Visa and Mastercard have monitoring programs that track chargeback rates. If your rate exceeds their thresholds, then you might be placed in a monitoring program, which can result in fines or restrictions on your ability to process payments.

To maintain a low chargeback rate, focus on the following practices:

Provide clear and accurate product descriptions.
Communicate proactively with customers about shipping and fulfillment.
Respond promptly to customer inquiries and complaints.
Display your refund and return policies clearly.

Learn more about preventing chargebacks and inquiries.

If your store has many small fraudulent orders or a sudden rise in declined transactions, then you might be experiencing card testing. Learn more about responding to card testing and reducing chargeback risk.

Provide the best evidence against a chargeback or inquiry

You have access to transaction records that the bank doesn't have. Your evidence includes order confirmations, delivery tracking, customer emails, and policy agreements.

Banks review a high volume of disputes, often hundreds per day. The reviewing agent might spend only a few minutes on your case. Prioritize your most compelling evidence by placing it first in your response so the strongest proof is seen immediately.

Structure your evidence submission in this order:

Direct proof: Delivery confirmation with signature, carrier tracking screenshots showing delivered status and matching address, refund transaction record, or usage logs.
Customer acknowledgment: Screenshots of emails or messages where the customer confirmed receipt, thanked you, discussed the product, or acknowledged the transaction.
Policy documentation: Terms of service or refund policy the customer agreed to at checkout that support your position.
Supporting context: Order history, address and payment verification results, or additional communication timeline.

Label every piece of evidence clearly. Instead of "attached screenshot," write a clear description, such as "Order confirmation email sent to customer on March 15, 2024, showing itemized total of $127.50."

If the customer has disputed the same transaction again after you won the original chargeback, then you can troubleshoot the pre-arbitration chargeback.

Document your orders and transactions

Effective chargeback preparation requires proactive documentation of your transactions. Use the following methods to document your orders and transactions:

Use tracking with delivery confirmation for all physical shipments.
Display policies clearly at checkout and in confirmation emails.
Keep communication records, including emails, chat logs, and support tickets.
Log digital access, including downloads, logins, and usage timestamps.
Save product listings by archiving your descriptions and images.

Evidence of customer contact

Credit card networks expect customers to attempt resolution with the merchant before filing a dispute. If a customer speaks to their bank without contacting you, then include the following evidence:

Evidence that no support request was received.
Your accessible contact information and resolution process.
A note that you would have resolved the issue if given the opportunity.

Chargeback fees by country when using Shopify Payments

When a chargeback is filed, your bank charges a processing fee. If you win the chargeback, then the fee is returned to you.

Shopify Payments countries and regions with their associated chargeback fees
Country or region	Chargeback fee
Australia	$25 AUD
Austria	€15 EUR
Belgium	€15 EUR
Bulgaria	€15 EUR
Canada	$15 CAD or $15 USD
Croatia	€15 EUR
Cyprus	€15 EUR
Czechia	€15 EUR or 400 CZK
Denmark	€15 EUR or 115 DKK
Estonia	€15 EUR
Finland	€15 EUR
France	€15 EUR
Germany	€15 EUR
Gibraltar	£15 GBP
Greece	€15 EUR
Hong Kong SAR	$85 HKD
Hungary	€15 EUR or 7000 HUF
Ireland	€15 EUR + 23% value-added tax (VAT)
Italy	€15 EUR
Japan	¥1,300 JPY
Latvia	€15 EUR
Liechtenstein	€15 EUR or 15 CHF
Lithuania	€15 EUR
Luxembourg	€15 EUR
Malta	€15 EUR
Mexico	$200 MXN
Netherlands	€15 EUR
New Zealand	$20 NZD
Norway	€15 EUR or 200 NOK
Poland	€15 EUR or 75 PLN
Portugal	€15 EUR
Romania	€15 EUR or 75 RON
Singapore	$16.35 SGD
Slovenia	€15 EUR
Spain	€15 EUR
Sweden	€15 EUR or 150 SEK
Switzerland	€15 EUR or 15 CHF
United Kingdom	£10 GBP
United States	$15 USD

Insufficient funds when a chargeback is opened

If you're using Shopify Payments and you don't have enough funds in your account to cover a chargeback or refund, then the outcome varies depending on your store's location.

Insufficient funds collection methods by location
Location	How funds are collected
Australia, Belgium, Canada, Czechia, Denmark, Finland, Germany, Ireland, Italy, Netherlands, New Zealand, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States	The balance is debited from your bank account. This debit occurs outside your regular payout schedule.
In all other countries	The amount is deducted from your future payouts until fully covered.

Failed debits when losing a chargeback

If the initial debit attempt fails, then a second attempt is made after 3 business days. If that also fails, then you need to take one of the following actions:

Update your Shopify Payments bank account, or
Contact Shopify Support to manually repay the negative balance.

Before you contact Shopify Support about a chargeback

Before reaching out to Shopify Support about a chargeback or inquiry, gather the following information to help resolve your issue faster:

The order number(s) affected by the chargeback or inquiry
The dispute type (for example, fraudulent transaction, product not received, or subscription canceled)
The current chargeback status that displays in your Shopify admin (open, submitted, won, or lost)
The evidence submission deadline, if the chargeback is still open
A description of the evidence you've already gathered or submitted
Whether a debit attempt has failed and which bank account is on file
Screenshots of any error messages you've encountered while submitting evidence
Steps you've already tried from the chargeback troubleshooting section

Having this information ready helps Shopify Support assist you more efficiently.