Chargebacks in retail are forced refunds initiated by a customer’s bank that pull money directly from your account, often costing retailers far more than the original sale amount. With global chargeback volumes projected to hit 261 million in 2025, rising to 324 million by 2028, they threaten profits, operations, and even your ability to process cards.

What is a chargeback in retail?

A chargeback happens when a customer disputes a card purchase with their issuing bank, which reverses the transaction and debits your merchant account—usually with an extra fee of $15–$25 per case. Unlike standard refunds handled through your store, chargebacks bypass your customer service entirely, giving banks control under card network rules from Visa, Mastercard, or American Express.

The process starts with the customer filing a claim for reasons like fraud, non-delivery or “not as described,” after which the bank credits them temporarily and notifies your acquiring bank. You then have a short window—typically 7–45 days—to submit evidence like proof of delivery or receipts. Without strong proof, the chargeback sticks, and you lose the sale, the goods and the fee.