The chargeback process progresses according to multiple, overlapping timelines. Key to organizing these timelines are the various time limits imposed on the different parties in a payment dispute. These time limits help to ensure that chargebacks and disputes don’t continue indefinitely. But they also follow the usual pattern of chargeback policies by favoring cardholders over merchants. Therefore, it is important for merchants to be aware of the timelines in order to ensure that they are not caught in a time trap.
What Are the Chargeback Time Limits for Merchants?
The amount of time merchants have to respond to chargebacks varies depending on the card brand. While some specific circumstances may call for exceptions, the following time limits by card brand generally hold true:
- American Express - 20 days
- Visa - 30 days
- Discover - 30 days
- Mastercard - 45 days
These time limits are repeated for each phase of the chargeback process in which merchants are given an opportunity to craft a response. The one notable exception is for Visa or Discover chargebacks that go to arbitration. In those chargebacks, either party has 10 days to respond to the pre-arbitration chargeback.
What Are the Chargeback Time Limits for Cardholders?
The federal minimum standard according to the Fair Credit Billing Act mandates that cardholders be given at least 60 days after a transaction to initiate a dispute over charges. However, most issuers allow cardholders to file disputes as long as 120 days after the transaction. This can sometimes vary based on specific policies tied to reason codes or issuer policies.
How Should a Merchant Navigate Chargeback Time Limits?
If a merchant has any reason to believe that a chargeback may be illegitimate, they will need to abide by the time limits for each step in the process of fighting the chargeback. Having a flexible, easy-to-use representment solution can help stay ahead of deadlines. So can having chargeback analytics that provide merchants all the information they need for their entire chargeback ecosystem. You can’t win a chargeback dispute and recover revenue if you don’t respond in a timely manner.
