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Chargeback Fundamentals

Core concepts for understanding the dispute ecosystem.

The Chargeback Lifecycle​

Customer Complaint → Issuer Review → Chargeback Filed → 
Merchant Notification → Representment (optional) → 
Pre-Arbitration → Arbitration → Final Decision

Timeline​

StageTimeframeAction Required
Dispute Window60-120 days from transactionCustomer files with issuer
Merchant Response7-30 daysSubmit representment
Pre-Arbitration30-45 daysIssuer challenges response
Arbitration45-90 daysNetwork makes final ruling

Key Concepts​

Liability Shift​

The party responsible for fraud losses depends on:

See EMV Liability Shift for the full matrix.

Compelling Evidence​

Documentation that can overturn a dispute:

  • Proof of delivery (signed, with tracking)
  • Customer communication
  • IP/device fingerprint matching
  • Previous undisputed transactions

See the full Compelling Evidence Guide for network-specific requirements.

Digital Goods: Evidence Patterns That Work​

Digital goods chargebacks are harder to fight because there's no physical delivery to prove. Here's what actually works.

The Digital Evidence Problem​

Physical GoodsDigital Goods
Tracking numberNo tracking
Delivery signatureNo signature
Photo of packageNo package
Clear "receipt"Receipt less tangible

Evidence That Works for Digital​

Evidence TypeWhy It's CompellingHow to Capture
IP address at purchaseLinks transaction to locationLog at checkout
IP address at accessProves delivery occurredLog at download/access
Device fingerprintSame device = same personFingerprint SDK
Account activity logsUsage proves deliveryIn-app tracking
Download timestampProves receiptServer logs
License activationTies purchase to usageLicense management

Digital Goods Evidence Package​

When fighting a digital goods chargeback, include:

  1. Purchase details

    • Transaction timestamp
    • IP address and location
    • Device fingerprint

  2. Delivery proof

    • Download timestamp
    • Access log showing content retrieved
    • License activation (if applicable)

  3. Usage evidence

    • Login timestamps after purchase
    • Feature usage logs
    • Content consumption (videos watched, files opened)
    • In-app purchases or upgrades after initial purchase

  4. Customer acknowledgment

    • Support tickets mentioning the product works
    • Reviews or feedback
    • Correspondence acknowledging receipt

Digital Evidence Requirements for CE 3.0​

For Visa CE 3.0 with digital goods, you need two of these four matching between disputed and prior transactions:

  • Device fingerprint (most reliable for digital)
  • IP address
  • User account
  • Delivery location (less applicable for digital)

Best practice: Collect device fingerprint + IP + account login for every digital purchase. This gives you CE 3.0 eligibility.

Digital vs. Subscriptions​

Dispute TypeKey Evidence
One-time digital purchaseDownload proof, access logs
Digital subscriptionOriginal consent, ongoing usage, renewal notifications
In-app purchaseAccount activity, prior purchases, game/app progress

Next Steps​

New to chargebacks?

  1. Understand the lifecycle - Full dispute flow
  2. Learn liability shift - Who pays for fraud
  3. Study evidence requirements - What wins disputes

Selling digital goods?

  1. Review digital evidence problem - Why digital is harder
  2. Collect the right evidence - IP, device, access logs
  3. Meet CE 3.0 requirements - Two of four matching

Fighting a chargeback?

  1. Build evidence package - Complete documentation
  2. Check reason code guides - Specific requirements
  3. Submit representment - Fighting disputes