Chargeback Guide

Everything merchants need to know about chargebacks—why they happen, how to handle them, and how to prevent them.

What is a Chargeback?

A chargeback is a dispute raised by a cardholder against a particular transaction. It is reported to their card-issuing bank, which then investigates the claim. Chargebacks are a mechanism provided by banks and card networks (like Visa and Mastercard) to protect customers from unauthorised or fraudulent payments.

When a complaint is raised, the bank informs the payment processor, such as Genixpay, and begins a formal investigation.

  • Customer-Initiated Chargebacks

  • Bank-Initiated Chargebacks

Examples of Customer-Initiated Chargebacks

  • Unauthorised or fraudulent transaction
  • Goods or services not received
  • Goods or services not as described
  • Cancellation not processed or refund not received
  • Incorrect or duplicate billing

Examples of Bank-Initiated Chargebacks

  • Late settlement by the merchant
  • Invalid or missing authorisation
  • Duplicate transaction processing

Key Parties Involved in a Chargeback

  • Cardholder:- The person who owns the card used in the transaction

  • Merchant:- The business providing the goods or services

  • Issuer Bank :- The bank that issued the card to the customer

  • Acquirer Bank :- The bank that processes payments on behalf of the merchant

  • Card Scheme (e.g., Visa, Mastercard): :- The network that governs transaction rules

  • Payment Gateway :- The technology platform facilitating the payment (e.g., Genixpay)

How Long Can a Chargeback Be Raised?

A customer has up to 120 days from the transaction date to file a chargeback. In certain cases (such as retrieval requests), this window may extend up to 13 months, depending on card network rules.

Why Merchants Should Avoid Chargebacks

Chargebacks don’t just mean lost revenue—they can damage your business’s credibility and may result in:

  • Additional penalties and fees
  • Monitoring or suspension by banks and card networks
  • Termination of your merchant account
  • Inclusion on industry blacklists

Banks view frequent chargebacks as a sign of poor customer experience. To minimise chargebacks:

  • Clearly display your refund and return policies on your website or app
  • Maintain proper documentation like invoices and proof of delivery
  • Communicate proactively with customers to avoid misunderstandings

How to Resolve a Chargeback

At Genixpay, we treat chargebacks with the utmost urgency to protect both the merchant and the customer. Below is the process we follow:

1. Notification

Once we receive a chargeback from the customer’s bank, Genixpay notifies the merchant promptly via email or phone.

2. Review

The merchant should assess the transaction and share a detailed explanation with Genixpay. If goods or services were not provided, let us know whether you can still deliver. If the delivery was completed, share documentation such as:

  • Invoice
  • Tracking number
  • Delivery confirmation
  • Screenshots or customer communication if available

3. Document Submission

After receiving the merchant’s response, Genixpay prepares and submits the required evidence to the acquiring bank for chargeback representation.

Final Note

Merchants are strongly advised to maintain clear records for every transaction and respond promptly to all chargeback notifications. A structured internal process and strong communication with customers can greatly reduce your chargeback rate and associated risks.