Chargeback guide: How to handle and prevent disputes

Written by Nanna | Mar 11, 2026, 1:00:00 PM

When a customer disputes a payment, it triggers a process that goes far beyond an ordinary cancellation. To protect your webshop’s bottom line, you need a quick response and solid documentation. If these cases are handled poorly, you can easily end up losing both the goods and money on unnecessary fees.

This article explains step by step how a chargeback works, which parties are involved, and how to optimize your webshop to minimize disputes in the future.

What is a chargeback?

A chargeback is when a transaction amount is returned to the cardholder after they have disputed the payment with their card-issuing bank. It can cover the full order amount or part of it, if some of the order is missing or wrong.

When cardholders disagree with a charge, they contact their card-issuing bank. If the bank decides the dispute is justified, the amount is deducted from your acquiring account until the case has been settled based on documentation.

Who is involved in a chargeback dispute?

A chargeback dispute involves five parties:

The cardholder (the customer)
The gateway (pensopay)
The acquirer (the acquiring bank)
The issuing bank (the customer’s bank)
The card scheme (Visa or Mastercard)

You need to understand these parties to follow how the case progresses. The issuing bank looks after the customer’s interests. Your acquirer helps you assess your evidence and presents it to the card scheme.

The 4 main reasons for chargeback disputes

Chargeback disputes are categorized by reason codes. The four main reasons are:

Fraudulent transactions
Product or service issues
Cancelled subscription payments
Technical errors

Once you know the reason codes, you can see exactly where your business needs to improve:

Reason Code	Description of the issue	Optimization and solution
Fraudulent transactions	Fraud using stolen card details, or unauthorized payments.	Implement 3D Secure (e.g. MitID verification) or add payment methods with biometric authentication (MobilePay, Apple Pay and Google Pay) to your checkout.
Product or service issues	The item isn’t delivered, is sent to the wrong address, or doesn’t match the description in the webshop.	Review your shipping routes and logistics partners. Make sure your product images and descriptions are 100% accurate and up to date.
Subscription payments	The customer has cancelled their subscription, but the webshop keeps charging them because the cancellation was registered late.	Improve your communication. Send automatic reminders by SMS or email a few days before payments are due.
Late capture	Capture is made more than 7 days after authorization. The problem is that the reservation may have been released after 7 days.	We always recommend capturing as close to the authorization date as possible, but no earlier than when the item is shipped. If you wait more than 7 days, the reservation may have expired, which can increase the risk of disputes. Since this isn’t always possible for every business model, we explain the most common reasons and what they mean here.

How to handle a chargeback dispute

When a dispute comes in, you can either accept the claim or reject it by submitting evidence. To win the case, you must provide concrete documentation, such as proof of delivery or your correspondence with the customer.

The process in 6 steps:

The cardholder contacts their bank.
The issuing bank assesses whether the claim has grounds.
The acquirer receives the claim and notifies the webshop.
The webshop owner chooses to reject the dispute and submits evidence (e.g. message history, or previous transactions the cardholder has completed in the webshop).
The acquirer assesses the evidence and forwards it to the issuing bank.
The issuing bank reviews the evidence and accepts or rejects the counterclaim.

If the issuing bank rejects the counterclaim, there are 2 more steps in the process:

Pre-arbitration: The parties’ last chance to reach an agreement or change the reason code.
Arbitration: The card scheme (Visa/Mastercard) makes a final and binding decision.

You can also find a detailed walkthrough of the technical steps in Clearhaus’ article on chargebacks.

Financial consequences and prevention

A dispute typically costs a fee of DKK 240, whatever the outcome of the case. The most effective strategy is therefore to stop disputes from happening in the first place.

Prevention checklist:

Always use shipping with tracking.
Make your billing descriptor easy for customers to recognize.
Make sure your contact details are easy to find, so customers contact you before they contact their bank.
If you suspect fraud: compare the billing and shipping addresses, and check whether the card’s country matches the customer’s location.

Conclusion: A more resilient webshop

Disputes are an unavoidable part of e-commerce, but a structured approach lets you minimize your losses. If you use security protocols like 3D Secure and keep your documentation in order, you’re in a strong position when something does go wrong.

At pensopay, we provide the tools and guidance you need to protect your webshop against unnecessary fees and fraud.