---
title: "What is a Chargeback?"
slug: "what-is-a-chargeback"
updated: 2026-01-05T17:56:14Z
published: 2026-01-05T17:56:14Z
stale: true
---

> ## Documentation Index
> Fetch the complete documentation index at: https://resource.payrix.com/llms.txt
> Use this file to discover all available pages before exploring further.

# What is a Chargeback?

A chargeback refers to the process of a cardholder disputing a charge with their credit card issuer or bank. Chargebacks can happen for various reasons, such as unauthorized transactions, items or services not received, or general dissatisfaction with that product or service. In a chargeback, the cardholder contacts their financial institution to initiate the process of reversing the transaction. The funds from the transaction are taken from the merchant’s account and returned to the cardholder.

# Chargeback Cycles

From the merchant's perspective there are just three stages:

- **Retrieval:** The initial request from the Issuer to the merchant for transaction information.
- **Chargeback:** The process of each individual dispute action from First Chargeback to Arbitration.
- **Resolution:** The final decision made by the Issuer for the merchant or Cardholder to receive full, partial or no credit.

When you’re ready to respond to a Chargeback Cycle and/or Dispute Stage, visit [Dispute Response Options](/v1/docs/dispute-response-options).

### Chargeback Time Limitations

Both chargebacks that have been manually requested by cardholders to their issuers and chargebacks automatically issued when preset risk, fraud, or other security parameters, configured by banks or issuers, have been met:

- **Manual Cardholder-Initiated:** Open for **up to** **270 days** from the original date of the transaction. This can extend to **up to 540 days** for payment of future delivery of goods or services.
- **Automated Issuer-Initiated:** Open with **an unlimited timetable**.

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## Chargeback vs Dispute

A Dispute and a Chargeback are two distinct processes related to payment disputes.

- A **Chargeback** occurs when a cardholder bypasses the Merchant entirely to dispute the transaction with their issuer or credit card company to reverse a transaction. Chargebacks are typically more formal and can also incur additional fees from a Merchant perspective. Chargebacks are typically initiated due to claims of fraud, or failure to receive goods or services.
- A **Dispute**occurs when a customer is questioning a transaction with their issuing bank or credit card company, typically due to concerns raised around unauthorized charges, billing errors, or overall dissatisfaction with a product or service. This can be a formal process initiated through their issuer or credit card company during the preliminary Chargeback proceeding or an informal process where concerns are raised by the cardholder directly and discussed with the merchant to seek a resolution.

Both listed processes above require prompt response from the merchant with compelling evidence provided to support their transaction’s validity.

A dispute initiated by a cardholder regarding the validity of a credit card charge. Chargebacks are usually initiated when the cardholder contacts the issuing bank, often due to an unauthorized charge, a dispute over goods, or other issue. This process results in a reversal of funds from the merchant's account by the card brand issuer, reimbursing the cardholder. To recover the funds, the merchant must provide supporting evidence to contest the chargeback.

An entity that can process transactions and has been onboarded through a Payrix Pro partner.

A process where a customer questions a transaction with their issuing bank or credit card company. Disputes typically arise due to issues such as unauthorized charges, billing errors, or dissatisfaction with a product or service. They can be formal, initiated through the issuer during the preliminary chargeback proceeding, or informal, where concerns are raised directly with the merchant to seek resolution.