A payment dispute raised by a buyer directly with their credit card or bank to reverse an online transaction.
A Chargeback Dispute is a formal payment reversal request initiated by a cardholder directly with their card-issuing bank or credit card company (such as Visa, Mastercard, or RuPay), bypassing the e-commerce merchant entirely. Chargebacks typically occur when a customer claims their card was used fraudulently, that they never received the ordered product, or that the delivered item differed significantly from the website description. When a chargeback is filed, the payment gateway instantly freezes the disputed transaction funds in the merchant's account and levies a chargeback processing fee (often ₹500 to ₹1,500). To defend against chargeback losses, merchants must submit compelling evidence within a tight window: including proof of physical delivery, signed courier AWBs, customer correspondence, and tracking logs. Managing chargeback rates is critical, as payment gateways will suspend merchant accounts if their dispute-to-transaction ratio exceeds 1%.