Tide Logo
Tide Logo
Tide Logo
Tide Logo

Protect your business from chargebacks

A chargeback is when a cardholder files a dispute with their bank to reverse a transaction, claiming it was unauthorised, fraudulent, or the product or service was unsatisfactory.

This guide shows you how to:

🔗 Understand chargebacks

🔗 Identify common reasons for chargebacks

🔗 Protect your business with best practices for preventing chargebacks

🔗 Collect and present your evidence

How chargebacks work

  1. A customer buys something, but wants their money back. They can raise a chargeback request up to 120 days after their purchase

  2. The issuing bank reviews the customer's claim and may ask for more information

  3. The issuing bank will get in touch with the card network (ie. Visa or Mastercard) to notify the business's bank

  4. The business receives the notice of the chargeback and can respond within 7 to 30 days

  5. The issuing bank reviews all evidence in up to 70 days, then makes a decision

  6. The cardholder learns the decision, and gets the money if it's in their favour.

Common reasons for chargebacks

Fraudulent transactions

The transaction supposedly wasn't authorised

Product not received

The cardholder did not receive the item

Defective or not as described

The received product was damaged

Duplicate charges

Many charges for the same transaction

Cancellations not honoured

The cancelled order was still charged

Subscription issues

Recurring charges for supposedly cancelled subscriptions

Billing errors

Incorrect amounts charged

Customer service issues

Unresolved customer service disputes

Lack of recognition

Cardholders may not recognise the business name on their statement

Unauthorised use

Payments from unauthorised purchases, from a lost or stolen card

How chargebacks can affect your business

Financial impact

You could lose sales or get higher fees

Operational disruption

You may have to invest time in staff training and investigations

Reputation and trust

You could potentially lose current or future customers

Difficulty to secure payment processing

You may struggle to sign favourable agreements

Risk of account termination

Your payment processor or bank may end your relationships

Legal and compliance risks

You may have to deal with regulatory issues

Increased fraud risk

Your high chargeback rate may hint at cyber vulnerabilities

Impact on cashflow

Your revenue could get tied up during disputes

Best practices for preventing chargebacks

Prevent chargebacks before making a sale

Clear descriptions

Have accurate product descriptions, pricing, and terms of service

Transparent policies

Implement clear return and refund policies that are easy to find

Quality control

Ensure products and services meet high-quality standards

Educate customers

Inform about policies, processes, and how to handle disputes before they escalate

Prevent chargebacks after making a sale

Proof of delivery

Set and meet a realistic delivery date. On delivery, ask the customer to sign for the package. Retain this as proof and for security measures

Avoid miscommunication

Keep customers updated with confirmations, shipping notifications, and follow-up emails

Prevent chargebacks resulting from customer support issues

Prompt customer support

Respond to inquiries, address issues, and resolve disputes via customer service

Monitor transactions

Keep an eye on transaction patterns and flag any suspicious activity

How to defend against a chargeback request

1. Organise your records

Keep detailed records

Have records of every transaction, including order details, payment confirmation, and customer information

Document communication

Save all your correspondence with the customer

Provide proof of delivery

Use services that offer tracking and delivery confirmation – ie. delivery receipts and tracking numbers

2. Get the correct communication ready

Capture evidence of product quality

Include photos or descriptions of the products before shipping

Include customer acknowledgments

Ensure that customers agree to terms and conditions or return policies

Use transaction logs

Keep your database updated with the latest transaction activities

3. Communicate actively

Collect customer feedback

Gather customer reviews post-purchase

Prepare a response template

Respond with a structured template

Stay organised

Maintain a system for organising and retrieving evidence quickly

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Tide Platform Limited (Tide) designs and operates the Tide website and app. Tide is not a bank. Tide is authorised by the Financial Conduct Authority (FCA) under the Electronic Money Regulations 2011 under firm reference number 900843 for the issuing of electronic money and the provision of payment initiation services and account information services under the Payment Services Regulations 2017. Tide is also authorised and regulated by the Financial Conduct Authority in relation to its credit and insurance broking activities (firm reference 718743). Tide is incorporated and registered in England and Wales with company number 09595646 and registered office at 4th Floor The Featherstone Building, 66 City Road, London, EC1Y 2AL. Tide offers bank accounts powered by ClearBank® Ltd (ClearBank) (account sort code is 04-06-05). ClearBank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 754568. Eligible deposits with ClearBank are protected up to a total of £120,000 by the Financial Services Compensation Scheme (FSCS), the UK's deposit guarantee scheme. For further information visit Home. ClearBank Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 754568). Registered Address: ClearBank, Level 27, The Broadgate Tower, 20 Primrose Street, London, United Kingdom, EC2A 2EW. Eligible deposits held in the Tide Business Current Account (powered by ClearBank) are covered by the Financial Services Compensation Scheme (“FSCS”) subject to eligibility. All eligible deposits at the same bank are aggregated to determine the coverage level for each depositor up to £120,000, therefore if you have any other product/services with ClearBank these will be aggregated. To find out more and to check your eligibility please visit: About us . Some of Tide’s members also hold e-money accounts powered by PrePay Technologies Limited (PPT) (account sort code is 23-69-72). PPT is an electronic money institution authorised by the FCA under the Electronic Money Regulations 2011 under firm reference number 900010 for the issuing of electronic money. PPT holds an amount equivalent to the money in Tide current accounts in a safeguarding account which gives members protection against PPT’ insolvency. Tide Cards may be issued by both Tide and PPT, who are licensed by Mastercard International for the issuance of cards. The issuer of your Tide card will be identified on your monthly card statement. Tide Capital Limited is an appointed representative of P1 Investment Services Limited which is authorised and regulated by the Financial Conduct Authority under firm reference number 752005 to carry out such regulated activities as are involved in the provision of Tide Investment Account. Seccl Custody Limited is the custodian of assets held in Tide Investment Account and is authorised and regulated by the Financial Conduct Authority (firm reference number 793200) and registered in England and Wales under No. 10430958. Registered office 20 Manvers Street, Bath BA1 1JW. Tide, the Tide logo, the Swell, and Do Less Banking are trademarks and trade names of Tide Platform Limited, and may not be used or reproduced without the consent of the owner.