Chargeback

Chargebacks exist to protect cardholders: if a card is used fraudulently, or goods never arrive, the cardholder can dispute the charge with their issuer rather than chasing the merchant. The issuer debits the acquirer, the acquirer debits the merchant, and the burden shifts to the merchant to prove the charge was valid.

How it works

Each dispute carries a reason code (fraud, product not received, duplicate processing, “credit not processed,” and so on) defined by each card network. The merchant can accept the chargeback or fight it through representment, submitting evidence such as delivery confirmation, signed receipts, or usage logs. The issuer reviews the evidence and either reverses the chargeback or upholds it; further appeal stages (pre-arbitration, arbitration) exist but carry network fees that often exceed the disputed amount. Merchants typically pay a fee per chargeback, commonly in the $15–$25 range depending on the processor, regardless of outcome.

Why it matters

Chargeback ratios are a compliance metric, not just a cost. Card networks run monitoring programs that flag merchants whose dispute rates exceed thresholds, historically around 0.9–1% of transactions, with excessive-fraud programs triggering earlier for card-not-present sellers. Merchants who stay in those programs face fines and ultimately account termination. For platforms and payment facilitators, one sub-merchant’s dispute problem can draw network scrutiny to the whole portfolio, which is why serious providers monitor ratios continuously and intervene early.

QorPay handles dispute workflows through QorCommerce, and its Circuit Breaker and Network Compliance Monitoring modules watch transaction patterns and dispute ratios so problems surface before the card networks flag them.