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Chargeback Process

  • Updated

 

Introduction

A chargeback happens when a customer disputes a card or UPI payment with their bank and requests a refund. As a seller, it’s important to understand how chargebacks work so you can respond promptly, provide required information, and minimize financial losses. This article explains the chargeback flow, what actions you should take, and how to resolve chargebacks on SmartBiz.

 

Prerequisites

Before proceeding, ensure you have:

  • Access to your SmartBiz desktop or mobile app

  • Relevant order details (order ID, transaction ID)

  • Any documents or proof related to the transaction (invoices, delivery proof, messages with the customer)

 

Chargeback Overview

A chargeback typically begins when:

  • A customer reports an unauthorized or incorrect transaction to their bank

  • The bank initiates a dispute and debits the amount from your account

  • The payment processor informs SmartBiz that a chargeback has been raised

Once the chargeback is raised, you will need to respond with evidence to support your case.

 

Step-by-Step: How to Respond to a Chargeback

Step 1: Get notified of a chargeback

  1. You will receive a notification in your SmartBiz app (mobile or desktop) when a chargeback is initiated.

  2. The notification will include the order ID, amount disputed, and reason code.

(Screenshot: Chargeback notification screen in app)

 

Step 2: Review chargeback details

  1. Open the Orders or Payments section.

  2. Locate the order with the chargeback status.

  3. Tap or click the order to view detailed chargeback information:

    • Date of transaction

    • Disputed amount

    • Chargeback reason provided by bank

(Screenshot: Chargeback details page)

 

Step 3: Prepare evidence to dispute the chargeback

Collect supporting documents that prove the transaction was valid:

Typical evidence includes:

  • Order invoice or receipt

  • Proof of delivery (tracking or delivery confirmation)

  • Communication with the customer (if relevant)

  • Terms of sale or refund policy links

(Screenshot suggestions: Upload evidence screen, example documents)

 

Step 4: Submit your evidence

  1. On the chargeback details page, select Add Evidence or Submit Response.

  2. Upload the documents collected earlier.

  3. Write a clear explanation supporting why the chargeback should be reversed (example: “Order delivered on X date, confirmed by customer signature”).

  4. Click Submit.

(Screenshot: Evidence upload & explanation field)

 

Step 5: Wait for resolution

After submission:

  • The bank will review your evidence

  • The bank decides whether to accept your response or rule in favor of the customer

  • The resolution timeline may vary (typically several business days)

You will be notified in SmartBiz once the chargeback is resolved.

(Screenshot: Chargeback status update or resolution notification)

 

During a chargeback, the disputed amount is held or debited from your account until the bank issues a decision. Responding with timely, accurate evidence increases the chances of a favorable outcome and reduces financial loss.

 

FAQs

  1. What is a chargeback?

    A chargeback is a dispute raised by a customer with their bank to reverse a payment they believe is unauthorized or incorrect.

  2. Why did a chargeback happen?

    Common reasons include:

    1. Unrecognized transaction on the customer’s statement

    2. Goods not received

    3. Incorrect product delivered

    4. Duplicate charges

    5. The bank provides a reason code when initiating the dispute.

  3. How long does a chargeback take to resolve?

    Resolution timelines vary by bank but typically take several business days after evidence submission.

  4. What happens if I don’t respond to a chargeback?

    If you do not submit evidence, the bank may rule in favor of the customer, and the disputed amount will not be returned to you.

  5. Will a resolved chargeback affect my account standing?

    Repeated chargebacks can impact your account performance metrics. Resolve each dispute promptly and maintain clear order and shipping documentation to reduce risk.

  6. Can I prevent chargebacks?

    You cannot prevent all chargebacks, but you can reduce them by:

    1. Providing accurate product descriptions

    2. Offering clear refund/cancellation policies

    3. Prompt shipping with delivery proof

    4. Communicating with customers proactively

       

The chargeback cycle is depicted below: