What Is a Chargeback?
7 Min Read | Published: April 25, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Credit card chargebacks are temporary credits from your issuer, typically when there’s a transaction issue. Learn how they protect you and affect merchants.
At-A-Glance
- A chargeback lets your card issuer investigate and temporarily credit a disputed charge when the merchant can’t resolve the issue.
- Chargebacks stay on your account when you win a dispute but disappear if you lose, while refunds are typically permanent and usually come directly from a merchant.
- Chargebacks usually don’t impact your credit score, but unpaid disputes or fraudulent claims may.
You might be unfamiliar with how chargebacks protect you against unexpected purchases on your Credit Card. A chargeback is a quick, sometimes permanent reimbursement that should only be used in certain situations and for certain transactions. Your credit card issuer will have a set process to follow but understanding what a chargeback means for everyone involved can help you navigate your disputes confidently.
What Is a Chargeback?
A chargeback is a quick, temporary credit from your card issuer while they investigate a purchase that you are disputing.1 If you win the dispute, the credit stays on your account, and the issuer decides whether the merchant, their bank, or another third party must cover the cost.2 If you lose, you may need to provide more proof or have the credit deducted from your account.3
- Chargeback vs. Refund
Wondering how credit card refunds work? Unlike a chargeback from your card issuer, with a credit card refund, the primary merchant refunds your purchase directly to your original payment method or credit card, usually after you return the item or in some cases, after you report customer dissatisfaction.4 - Chargeback Period
You may have 120-180 days from the charge date to open a dispute with your card issuer, but timeframes can vary depending on factors including the credit card issuer, merchant policies, and your reason for the dispute.5 - Chargeback Impacts on Merchants and Issuers
Merchants can face challenges when customers file chargebacks because they may lose the sale and the merchandise or owe payment processors expensive fees.6 Too many chargebacks may raise a business’s overall costs, complicate future payments, or lead to stricter rules from their payment providers.7
Common Reasons for Credit Card Chargebacks
Merchant disputes can be a way to refer to chargebacks and common chargeback reasons. Understanding these typical merchant dispute examples may help you to identify them:
- Delivery Issues
You may consider disputing charges when you’re billed for items you didn’t receive or that differ significantly from what the merchant promised.8 If your order is delayed, the merchant must inform you and let you choose between waiting or canceling for a full refund.9 - Billing Errors
Billing errors may happen when you:- Are charged the wrong amount
- Receive a damaged product
- Are billed more than once for the same order
- See a charge for something you never bought or ordered but didn’t receive
- Get a bill for a subscription you canceled in time
You can dispute billing errors with your credit card issuer in writing, over the phone, or online, typically within 60 days of receiving a card statement with mistakes.10 However, before you do, make sure you attempt to resolve the issue with the merchant first. - Fraud
You can dispute a charge if you don’t recognize it. But be sure to check the date, amount, and merchant name to see if anything looks familiar before you request a chargeback for fraudulent activity, as people sometimes mistakenly open disputes for charges that they made but don’t recognize.11
Did you know?
American Express® offers fraud account alerts to instantly notify you if something unusual happens. With just one click via text, email, or push notification, you can confirm legitimate charges and stay on top of your purchases.
How to File a Chargeback
It’s important to work to resolve the issue with the merchant first before reaching out to your credit card issuer. You may be able to resolve issues faster this way, and it’s an important first step in the process.
If you need to file a chargeback with your credit card issuer, here’s how you can get started:
- Check Your Credit Card Issuer’s Dispute Process
Credit card issuers may let you file disputes online, through an app, by phone, or by mail. Look up your card issuer’s specific process to avoid unnecessary delays. - Gather Supporting Documents
You may need to provide evidence to back up your claim, like receipts, invoices, contracts, or merchant communication records. - Submit Your Dispute
Once you file a chargeback, your credit card issuer will review the claim. If they accept it, you may receive a temporary credit while the process finalizes. - Monitor the Progress of Your Dispute
The chargeback process can take time while your issuer, the card network, and the merchant’s bank communicate, so try to keep tabs on updates or requests for more information. - Understand the Possible Outcomes
The merchant may accept the chargeback or dispute it. If the merchant challenges your claim, the process can take longer and potentially require more documentation. Depending on the decision and outcome, you may also end up needing to pay the charge in the end. - Await the Final Decision
Ultimately, the card network decides who is responsible for the charge. If your dispute is successful, the temporary credit should become permanent.
Do Chargebacks Impact Your Credit Score?
Curious about what does and doesn’t show up on your credit report? Chargebacks typically do not directly impact your report or credit score, especially while the issuer investigates the dispute.12 However, deliberately filing a fraudulent chargeback or disputing a large debt that neither the issuer nor the merchant reimburses in the end, may negatively impact your credit score.13 You can monitor the potential impact of your chargebacks by regularly reviewing your credit report.
Frequently Asked Questions
An example chargeback situation might occur when you can’t contact a merchant to request a refund, so you initiate a chargeback with your card issuer. You might experience this situation if you use your credit card to buy an item from an online store that permanently closes before the item arrives.
Consumers don’t usually pay chargeback fees, but merchants do, and they may range from $20-$100, but this varies.14 However, costs don’t stop at chargeback fees, as merchants often have to pay service fees to process the chargeback as well.15
The minimum amount for chargebacks may depend on your issuer and the merchant. Usually, issuers grant chargebacks for smaller purchases.16
The Takeaway
Chargebacks can be a good solution in some situations. For faster and simpler resolutions, be sure to dispute charges directly with the merchant first, before filing a chargeback with your credit card issuer.
1,2,3,4 “What is a chargeback?,” Bankrate
5 “Chargeback FAQs,” Penn State
6,7 “How to Cancel a Chargeback,” Experian
8,9,10 “What To Do if You’re Billed for Things You Never Got, or You Get Unordered Products,” Federal Trade Commission (FTC)
11 “What to do if you accidentally dispute a credit card charge,” Bankrate
12 “Using Credit Cards and Disputing Charges,” Federal Trade Commission (FTC)
13 “If I dispute a debt, how does that show up on my credit report?,” Consumer Financial Protection Bureau (CFPB)
14,15 “Understanding Credit Card Processing Fees and Chargebacks,” U.S. Chamber of Commerce
16 “What Is A Credit Card Chargeback?,” Forbes
Liv Gillespie is a Philadelphia-based writer with a double M.A. in English Linguistics & Literature and Secondary Education. Her work focuses on personal finance.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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What Is Provisional Credit?
A provisional credit is a temporary credit applied to your account while a dispute is investigated. Its permanence depends on the outcome of the investigation.
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