Chargebacks in your online store: what they are, what evidence is required and how to avoid them

One day the gateway notifies you: a customer's bank has taken back the amount of an order from a month ago. Nobody asked you anything, the money is gone and on top of that you are charged a handling fee. It is a chargeback, and although you can fight it, you will only win if you have the right evidence and respond in time.

What a chargeback is

It is the reversal of a card payment that the cardholder requests from their bank, not from you. The issuing bank withdraws the amount and returns it to its customer while the case is resolved, and your acquirer (the bank or gateway that provides your card terminal) deducts it from you. You can submit evidence to recover it; the issuer decides.

It is different from a normal refund: with a refund you decide, and with a chargeback others decide, following rules set by the card schemes.

The cardholder has plenty of time to claim. Payment services legislation (in Spain, Royal Decree-Law 19/2018, which transposes the European payment services directive) allows them to report an unauthorised transaction up to 13 months after the charge, and the card networks set their own deadlines for the other reasons. An old order is not safe just because it is old.

How the process works

1. The cardholder files a claim with their bank.
2. Your gateway or acquirer notifies you of the chargeback with a reason code and a deadline to respond, which is usually short.
3. You submit the evidence, or accept the chargeback.
4. The issuing bank decides. Depending on the case, there may be a second stage in which the cardholder insists and you respond again.

The most common reasons and what evidence works

The evidence has to be specific and relate to the order in question. A text explaining that «we are a serious store» is useless; a PDF with the tracking, the delivery signature and the customer's email thanking you for the package is not.

Refunding in time is the best defence

Some chargebacks are opened by customers who first tried to talk to you and got no answer. Or who asked for a refund and it took so long that they went to their bank. If the customer is right, refund them yourself, and quickly: you save the chargeback fee, the time spent preparing evidence and, above all, it does not count towards your ratio.

Why the number of chargebacks matters

Card schemes monitor the chargeback ratio of every merchant. If yours goes up, your acquirer may ask for explanations, hold back part of your payouts, raise your fees or, as a last resort, take away your card terminal. That is why it pays to avoid chargebacks that should never exist, even if you would win them.

How to avoid the ones that should never exist

• A recognisable name on the statement. If the charge shows the company's legal name rather than the store's name, the customer does not recognise it and files a claim. Ask your gateway to use a clear trading name.
• Customer service that responds. A visible email address or phone number, answered the same day, keeps the customer from going to the bank.
• A clear returns policy, accepted at checkout.
• Tracked shipping and, for high amounts, with signature.
• Honest subscriptions: a reminder before each renewal and easy cancellation.
• Zero duplicate orders. A customer charged twice because of a technical fault in the store is an almost certain chargeback.
• Review of suspicious orders before shipping, so you do not lose the product as well in fraud cases.

The paperwork afterwards

When you refund an invoiced order, the invoice is not deleted: a corrective invoice (factura rectificativa, the credit note required in Spain) is issued for the amount refunded. The same applies to a lost chargeback, even though you did not initiate it. How you record it in the accounts is up to your accountant, but the store should keep a record of every refund, its reason and who made it.

Checklist

• Know who receives chargeback notifications and the deadline to respond.
• Keep per order: payment authentication, tracking, communications and the product page.
• Refund quickly when the customer is right, before they go to the bank.
• Do not refund an order whose chargeback is already open.
• A clear trading name on the statement.
• A corrective invoice for every refund.

How to solve it in PrestaShop

RKR Refound Orders lets you refund all or part of an order through the original gateway without leaving the back office —Stripe, PayPal, Redsys / Bizum, Paycomet, manual or via hook—, with its corrective invoice in PDF. If the connection fails and you retry, it does not refund twice, and you can require approval above a certain amount. The customer can request the refund from a dedicated page in the store, within the window and with the reasons you define, and every step is logged with employee and date. To avoid chargebacks for duplicate charges, RKR Order Guard prevents two gateway notifications from creating two orders and flags the carts that already have two payments so you can decide on the refund.