Chargebacks threaten high-risk businesses with lost money, closed accounts, and higher fees. Most merchants can’t fight back effectively, leading to more problems.
But you can win by collecting better evidence, understanding processor rules, and avoiding mistakes. The benefits of reducing chargebacks extend beyond recovering lost revenue.
As Dennis, the CEO of Fasto puts it: “Chargeback dispute resolution isn’t just about recovering lost revenue, it’s also about protecting your merchant account from excessive chargebacks that could lead to higher fees or account termination.”
This guide shows you how to beat chargebacks, protect your profits, and keep processing payments.
Why Winning Chargeback Disputes Matters for High-Risk Businesses
Chargebacks Impact Merchant Accounts & Approval Rates
Chargebacks don’t just cost you the disputed amount. They trigger a domino effect.
Excessive disputes lead to inflated processing fees as payment processors label your business “high-risk.”
Visa and Mastercard penalize merchants with chargeback ratios above 1%, often resulting in account termination.
Processors may also hold 5–10% of your revenue as collateral. For industries like adult, CBD, or travel, even a few losses can cripple your ability to accept payments.
Why Most Merchants Lose Chargeback Disputes
Merchants face an uphill battle against chargebacks. Many lose disputes because they submit incomplete evidence (like missing timestamps or delivery confirmation).
Response time is also critical, as merchants only have 7-21 days to fight a dispute, and many miss these deadlines without automated systems. Without proper strategy, businesses are essentially giving away money to customers and banks.
How to Win Chargeback Disputes
1. Gather Strong Evidence for Chargeback Disputes
Winning starts before the chargeback hits. Document everything, including signed contracts, order confirmations, and AVS/CVV checks.
Track delivery with verified tracking numbers, geolocation data, and IP logs. Preserve customer interactions such as emails, chat logs, and recorded calls showing refund refusals.
For “product not received” claims, submit timestamped screenshots of your terms of service and automated delivery notifications.
If a customer files a dispute before delivery but the product arrives later, immediately update the bank with proof of delivery and supplier tracking updates.
2. Understand Reason Codes & Payment Processor Policies
Each reason code has unique rules. For fraud claims (Code 10.4), prove the customer authorized the transaction using IP address matches or billing address verification.
Subscription cancellations (Code 13.2) require evidence that the customer acknowledged your cancellation policy. Tailor your rebuttal to the code’s requirements as generic responses fail.
3. Avoid Common Mistakes that Lead to Chargeback Losses
Avoid three critical errors.
First, ignoring customer service logs. A single unresponsive ticket can sink your case.
Second, missing representment deadlines. Automate alerts for Visa’s 30-day window and Mastercard’s 45-day limit.
Third, fighting un-winnable disputes. Focus on “friendly fraud” cases where you have irrefutable proof, not legitimate bank errors.
How to Choose Between Payment Dispute Resolution Services
Here are the top features to look for in a dispute resolution software:
Real-Time Transaction Monitoring
In high-risk sectors, fraud evolves by the minute. A lag of even a few hours in detecting suspicious activity can lead to thousands in losses.
Real-time monitoring analyzes IP location, device data, and purchase history to immediately flag unusual activities. When a new device in a high-fraud region attempts a $500 purchase, the system triggers an instant review. Meanwhile, trusted customers making routine CBD orders proceed without interruption.
Solutions like FastoSafe combine instant alerts with risk scoring to block fraud while allowing legitimate sales – crucial for industries like gaming where false declines can drive away loyal customers.
Dynamic Authentication with 3D Secure
Static verification methods no longer suffice for preventing online transaction fraud.
Seek solutions offering 3D Secure 2.0, which analyzes transaction risk in real time and only challenges suspicious activities.
This creates a balance: a trusted customer’s impulsive 3 AM purchase from their usual device proceeds smoothly, while a high-value order from an unfamiliar location with mismatched shipping details triggers additional verification like a fingerprint scan or one-time code.
Chargeback Alerts and Evidence
For every $100 lost to fraud, you actually lose $360 when including fines and operational costs.
Modern fraud protection provides early warnings to stop disputes before they become chargebacks.
Look for services partnered with networks like Ethoca and Verifi that alert you when customers initiate disputes.
This allows you to issue refunds before chargebacks are filed, avoiding costly fees. A travel agency, for example, could quickly resolve a “services not rendered” claim by providing booking confirmation and delivery proof within hours.
Compliance with Global Standards
High-risk businesses operate under intense scrutiny from payment processors and regulators.
Each industry faces unique challenges: THC merchants need robust age verification, while CBD merchants must prove they’re not shipping to restricted locations. Mistakes risk not just fines but complete loss of payment processing abilities.
Effective payment dispute resolution services must enforce compliance automatically, without requiring constant manual oversight.
FastoSafe exists to shoulder the burden of fraud prevention. With high-risk payment expertise, real-time alerts, and AI-driven defenses, we transform chargeback management from a nightmare into a streamlined process.
