Chargebacks
Chargebacks are part of the payment dispute lifecycle that occurs when a cardholder disputes a transaction with their bank or card issuer.
Revup supports merchants throughout this lifecycle, including pre-dispute prevention through Rapid Dispute Resolution (RDR) and the handling of chargeback notifications.
Unlike a refund, which is initiated by the merchant, a chargeback is initiated by the cardholder through their bank or card issuer.
RDR operates before a dispute becomes a chargeback and can resolve eligible disputes at the pre-dispute stage. If a dispute is not resolved through RDR, it can proceed through the applicable chargeback process.
When a chargeback is received, Revup notifies the merchant so that the merchant can review the transaction and take the appropriate action.
Chargeback lifecycle
Rapid Dispute Resolution (RDR)
Rapid Dispute Resolution (RDR) is a chargeback prevention mechanism that operates at the pre-dispute stage.
RDR allows eligible disputes to be addressed before they become formal chargebacks.
When a potential dispute is received through RDR, the applicable RDR rules determine how the dispute is handled. An eligible dispute can be resolved before it progresses to the chargeback stage.
This allows merchants to address certain disputes before they become chargebacks and can reduce the number of disputes that reach the chargeback process.
RDR is a chargeback prevention mechanism, not a chargeback itself.
A dispute resolved through RDR does not proceed through the normal chargeback lifecycle.
RDR flow
RDR and chargebacks therefore represent different stages of the dispute lifecycle.
RDR and chargebacks
| RDR | Chargeback | |
|---|---|---|
| Stage | Pre-dispute | Chargeback |
| Purpose | Resolve eligible disputes before they become chargebacks | Process a transaction dispute after it becomes a chargeback |
| Merchant involvement | Governed by the applicable RDR configuration and rules | Merchant reviews and handles the chargeback |
| Outcome | Dispute can be resolved before becoming a chargeback | Chargeback proceeds through its applicable lifecycle |
If an eligible dispute is resolved through RDR, it does not need to continue through the standard chargeback process.
If the dispute is not resolved through RDR, it can continue through the applicable dispute and chargeback process.
Refund vs. chargeback
Refunds and chargebacks are different processes.
| Refund | Chargeback | |
|---|---|---|
| Initiated by | Merchant | Cardholder |
| Initiated through | Revup Back Office or API | Cardholder's bank or card issuer |
| Purpose | Return funds to the customer | Dispute a card transaction |
| Merchant control | Merchant decides whether to initiate the refund | Merchant does not initiate the chargeback |
| Notification | Refund status notifications | Chargeback notifications |
A merchant should not treat a chargeback as a refund request.
Receiving chargeback notifications
When Revup receives information about a chargeback, it sends a notification to the merchant's configured notification URL.
Your backend should process the notification and associate the chargeback with the corresponding transaction.
Chargeback notifications allow the merchant to keep its internal systems synchronized with the chargeback lifecycle.
For more information about notification handling, see Notifications.
Chargeback information
A chargeback notification contains information that allows the merchant to identify the affected transaction and understand the chargeback.
Your integration should store the relevant chargeback information together with the original transaction.
This allows your customer support, finance, and operations teams to investigate the dispute and determine the appropriate response.
The original payment transaction should remain available in your system even when a chargeback is received.
A chargeback is an event related to the original transaction, not a replacement for it.
Handling a chargeback
When a chargeback is received, the merchant should:
- Identify the original transaction.
- Store the chargeback information.
- Review the transaction and the reason for the dispute.
- Gather any relevant evidence or supporting documentation.
- Follow the applicable chargeback process and deadlines.
- Keep the internal transaction and chargeback status up to date.
The specific actions required can depend on the payment provider, card scheme, and reason for the dispute.
Chargeback lifecycle
A chargeback can go through different stages as the dispute is processed.
Revup communicates chargeback-related updates through notifications so that the merchant can keep its systems synchronized with the current state.
Your integration should therefore be prepared to receive more than one notification for the same transaction or chargeback.
Do not assume that the first chargeback notification represents the final outcome of the dispute.
Chargebacks and refunds
A chargeback should not normally be handled by automatically issuing a refund.
A chargeback is already part of a dispute process initiated by the cardholder and their bank or card issuer.
If the merchant independently issues a refund for the same transaction, the merchant should ensure that its internal systems correctly track both operations and avoid treating them as the same event.
Do not automatically create a refund whenever a chargeback notification is received.
Review the chargeback and follow the appropriate dispute process for the transaction.
Chargebacks and subscriptions
Chargebacks can also affect transactions generated through subscriptions.
If a customer disputes a recurring payment, the chargeback relates to the specific transaction being disputed.
The chargeback does not automatically cancel the subscription.
If the merchant wants to prevent future recurring payments, the subscription must be managed separately.
A chargeback and a subscription cancellation are separate operations.
A merchant should handle the disputed transaction and the subscription lifecycle independently.
Chargebacks and token-based payments
Chargebacks can also affect transactions created using a payment token.
The payment token does not change the chargeback process for the resulting transaction.
Your backend should associate the chargeback with the specific transaction that was disputed and keep the relevant transaction and chargeback information available for reconciliation.
Recommended handling
When implementing chargeback handling, your backend should:
- Receive chargeback notifications.
- Identify the affected transaction.
- Store the chargeback information.
- Keep the original transaction and chargeback linked.
- Review the dispute and its reason.
- Collect the required supporting information.
- Process subsequent chargeback notifications.
- Keep the chargeback state synchronized with Revup.
Chargebacks are asynchronous events that can occur after the original payment has been completed.
Your backend should therefore be able to process chargeback notifications independently of the original checkout session.
Related documentation
- Handle the payment result — understand how to determine the state of a payment.
- Notifications — receive and process transaction, refund, and chargeback notifications.
- Refunds — return funds to a customer through a merchant-initiated refund.
- Subscription API reference — manage subscriptions and recurring payments.