When a customer files a chargeback, it’s not always because of fraud. Often, it’s the result of a preventable issue, like how something was described, delivered, or supported.
If you’re seeing more disputes than usual, it’s worth understanding what’s actually driving them. Because of the reason code on the statement? It’s not always the full story.
The Real Drivers Behind Most Chargebacks
Let’s start with the big picture. A chargeback occurs when a cardholder contacts their bank to dispute a transaction instead of requesting a refund directly from the merchant. Banks review the claim, assign a reason code, and reverse the funds if they side with the customer.
While banks categorize these by reason codes (fraud, processing error, consumer dispute), the code isn’t always the real reason. Many disputes are simply a reflection of customer frustration, unclear communication, or system failures.
Here are the most common reasons chargebacks happen, what they actually mean, and what you can do to prevent them.
1. Friendly Fraud (aka First-Party Misuse)
Friendly fraud happens when a cardholder makes a purchase, receives the product or service, and then disputes the charge anyway. It can be intentional (theft) or accidental (forgetting a purchase, not recognizing the charge).
Why it’s common:
It’s easy. Customers know banks often default to the cardholder’s side. And if the descriptor is vague or they forgot the order, they’ll assume it’s fraud.
How to prevent it:
- Use clear, recognizable billing descriptors.
- Send confirmation emails and receipts.
- Provide easy access to customer service before they go to the bank.
2. Actual Fraud (Card-Not-Present Theft)
This is what people usually think of when they hear “chargeback.” A fraudster uses stolen card info to make a purchase. The real cardholder disputes the charge.
Why it’s common:
Online fraud is rising, and merchants that don’t use strong identity verification are easy targets.
How to prevent it:
- Use 3D Secure (3DS2) or similar authentication tools.
- Set fraud filters that flag suspicious behavior.
- Monitor for inconsistent shipping and billing addresses.
3. Product Not Received (Service Not Rendered)
A customer claims they never got what they paid for. This might be due to late shipping, failed delivery, or confusion over digital access.
Why it’s common:
If tracking isn’t clear or delivery confirmation is missing, customers assume the item was never sent.
How to prevent it:
- Always provide tracking numbers.
- Use delivery confirmation for physical goods.
- For digital products, log access times or download data.
4. Item Not as Described
A customer says the item they received doesn’t match what was advertised. This could be about quality, color, size, functionality, or even missing parts.
Why it’s common:
People rely on product descriptions and images. If there’s a mismatch, they often skip customer service and go straight to a dispute.
How to prevent it:
- Write honest, detailed product descriptions.
- Include high-quality images.
- Have a clear return policy and visible support channels.
5. Subscription Billing Issues
Recurring billing can be tricky. Customers forget they signed up, misunderstand the terms, or believe they canceled.
Why it’s common:
Lack of reminders or hard-to-find cancellation options frustrate users, and banks make it easy to dispute recurring charges.
How to prevent it:
- Send pre-bill reminders.
- Make cancellation straightforward.
- Show billing history in user accounts.
6. Clerical or Processing Errors
This includes duplicate charges, wrong amounts, or incorrect currency. These errors are rare but instantly spark disputes.
Why it’s common:
Even small mistakes show up clearly on a statement. If a customer sees two charges, they’ll file quickly.
How to prevent it:
- Automate your billing process to reduce manual errors.
- Reconcile transactions regularly.
- Flag duplicate attempts at checkout.
7. Misleading or Hidden Policies
Sometimes it’s not the product but the way it was sold. If return or refund policies are buried or confusing, customers won’t follow them, instead, they’ll go to the bank.
Why it’s common:
Shoppers expect transparency. If they feel tricked, they won’t wait around for merchant support.
How to prevent it:
- Display refund and cancellation policies clearly.
- Avoid aggressive upsells without explanation.
- Make it easy to reach support or find help documents.
8. Delayed Fulfillment or Access
Delays can cause confusion and frustration. If there’s a long wait between payment and delivery, customers may assume something’s wrong.
Why it’s common:
People expect instant results. Especially for digital goods, any lag can trigger panic.
How to prevent it:
- Communicate delivery timelines upfront.
- Send updates if delays occur.
- Make post-purchase status pages easy to check.
Final Thoughts
Understanding what are the common reasons for chargebacks helps you fix the root cause. Whether it’s poor communication, unclear billing, or customer confusion, most chargebacks can be prevented long before they reach the bank. Watch for patterns. Tighten up fulfillment. Keep policies clear. And give customers fewer reasons to feel unsure or frustrated.
FAQs: Common Reasons for Chargebacks
What are the common reasons for chargebacks?
The most common chargeback reasons include friendly fraud, actual fraud, product not received, item not as described, subscription billing disputes, processing errors, and vague refund policies. Each of these has technical codes but often stems from customer confusion or system failure.
How can friendly fraud be prevented?
Friendly fraud is best prevented by clear communication. Use recognizable billing descriptors, send detailed receipts, and make sure support is easy to reach so customers don’t go to the bank first.
Are chargeback reason codes always accurate?
Not always. Reason codes are assigned by banks but don’t always reflect the true cause of the dispute. For example, friendly fraud often gets labeled as unauthorized use.
What’s the difference between friendly fraud and true fraud?
True fraud involves a stolen card used without the real cardholder’s knowledge. Friendly fraud happens when the actual buyer disputes the charge anyway, either intentionally or by mistake.
Do shipping delays really cause chargebacks?
Yes, especially if there’s no communication or tracking. Customers may assume the order failed and request a chargeback even if the product eventually shows up.
Can recurring billing cause chargebacks?
Recurring billing is one of the top reasons for chargebacks. Customers may forget the charge, assume they canceled, or be unaware of the subscription terms if reminders weren’t sent.
Should I fight every chargeback?
No. Focus on disputing chargebacks with clear evidence, especially when you suspect friendly fraud. For others, like actual fraud or legitimate service failures, it may be better to accept the loss and fix the process.
Stay One Step Ahead with Chargeblast
Chargebacks don’t always give you a fair shot. But Chargeblast does. With tools that spot fraud early, block risky transactions, and alert you before a dispute hits, you can stop the cycle before it starts. Book a demo today and witness the experience yourself.
