When a Customer Disputes a Card Payment

“The customer did a chargeback after I finished the job.” Usually the money has already been pulled from your account by the time you hear about it, and the clock to answer has started. A card dispute is not a lawsuit and not a negotiation with the customer: it is a decision made by the customer’s bank, on paper, under the card network’s rules. That makes it winnable when the paper is good and lost when it is not. Here is how the process runs, what the bank looks at, and how to make the next one less likely.

How a dispute works

Visa’s guide for merchants describes it simply: a dispute happens when the cardholder questions a transaction and contacts their bank, the issuer. If the claim meets the criteria, the issuer sends the transaction back through the payment network to your bank or processor, the acquirer, and you may get the chance to respond with documentation.

Stripe’s documentation shows what that looks like from your side. When a formal dispute is filed, the card network pulls the disputed funds; Stripe debits your balance for the disputed amount plus a dispute fee, and those funds are held for the whole dispute. Stripe adds that it does not control the result, which “is at the sole discretion of the account owner’s bank.” Other processors run the same network process with their own fees and screens, so check your merchant agreement for yours.

The customer’s rights behind it

For credit cards, federal law backs the customer up. Under Regulation Z, a “billing error” includes a charge “for property or services not accepted by the consumer” or “not delivered to the consumer” as agreed, and the customer’s written notice must reach the card issuer no later than 60 days after the first statement showing the charge (12 CFR §1026.13).

A second rule covers quality complaints. When a merchant “fails to resolve satisfactorily a dispute as to property or services purchased with the credit card,” the cardholder may assert their claims and defenses against the card issuer, if they made a good faith attempt to resolve it with you first, the charge was more than $50, and the sale happened in the same state as the cardholder’s address or within 100 miles of it (12 CFR §1026.12(c)). Most home-service jobs meet those last two conditions easily.

The card networks’ own rules set the longer windows. Stripe says networks typically allow cardholders to dispute within 120 days of the payment, with more time in some situations; when a customer pays ahead for a service, the window generally starts on the service date, not the payment date. Under that general rule, a deposit taken in March for a job done in June could still be disputed in the fall.

Your deadlines, and what it costs

• Answer in days, not weeks. Stripe says you usually have 7 to 21 days to respond, depending on the card network, and that if you do not respond before the deadline “you automatically lose the dispute.” Visa’s guide warns that a missed window can lose the case “even if your evidence is strong.”
• One shot. On Stripe you have only one opportunity to submit your response, and you cannot add files afterward.
• Then wait. The issuer usually takes 60 to 75 days to decide once you submit, and the whole process can take two to three months, per Stripe.
• The fees. Stripe’s published US fees, checked October 2026: $15 when a dispute is received, which it does not return, and a further $15 if you counter the dispute, which it returns if you win. Your processor’s may differ.

Turn on every alert your processor offers, and treat a dispute email like a stop-work order: it goes to the top of the pile the day it arrives.

Read the reason first

Visa groups dispute reasons into four categories: fraud, authorization, processing errors and consumer disputes. The evidence that wins depends entirely on which one you got. Visa’s guide is blunt: do not send “a one-size-fits-all response.” The ones contractors see most:

• “I did not authorize this.” Stripe calls fraud the most common dispute reason and a difficult one to win. Typing the card in makes it harder still. Where the card was present but keyed in rather than read, Visa says “Copies of the card, handwritten card numbers, or pencil rubbings are not considered valid imprints,” and its other options for US sales are narrow: an undisputed card-present sale on the same card before or after, or the cardholder’s ID together with a receipt, invoice or contract tied to it.
• “The work was never done.” For services, Visa asks for “records, service logs, or signed acknowledgement showing that the cardholder received the service.”
• “Not as described” or defective. Visa lists services that “were poorly performed or did not match the agreed scope.” You answer by showing what was promised before payment and that you delivered it, or that you offered the repair or refund your stated policy promised. Visa adds that “Verbal explanations or internal notes do not replace customer-facing disclosures.”
• Cancelled. Visa says cancellation terms must be disclosed before purchase to be relied on, and lists a cancellation made within a legally protected period among the typical causes. If the sale was made at the customer’s home, read The 3-Day Right to Cancel.

The evidence file that wins

Visa says evidence works best when it links the charge to the cardholder, shows the cardholder took part in or benefited from the transaction, and confirms the work was “processed, fulfilled, and billed according to agreed terms.” It also says more paper does not help: “Effective responses focus on relevance and clarity, not volume.” For a service job, Stripe’s evidence lists for an offline service make a good checklist: a signed contract or work order with the service date, the customer’s signature, your written account of any phone conversations with dates, screenshots of texts and emails, and your refund or cancellation policy with how the customer saw it before paying.

For a contractor, that file is:

1. The signed contract or accepted estimate, with the scope and the price. What a Home Improvement Contract Must Say covers what belongs in it.
2. Every signed change order; an unsigned add-on is the easiest line for a bank to doubt. See Change Orders.
3. Dated photos of the finished work, and of the starting condition where it matters.
4. A completion sign-off or walk-through note with the customer’s name.
5. The invoice and the receipt.
6. The messages: the complaint, if there was one, and every offer you made to fix it.

Mind the format too. Stripe caps the combined evidence at 4.5 MB, limits Mastercard evidence to 19 pages, and says banks will not review audio or video files or click links, so put photos and screenshots in a PDF and write a one-page summary on top.

A worked example. Say a fence company finishes a 6-foot board-on-board privacy fence for $4,800, paid by card on completion, and three weeks later gets a “not as described” dispute claiming the fence is too short. The response is four pages: a summary, the signed estimate with “6 ft board-on-board” in the scope, two dated photos with a tape measure on a post, and the customer’s text the day of completion saying it looked great. No promise how the bank will rule, but that is a file that answers the claim made.

Talk to the customer, and still answer the bank

Many disputes are a confused customer, not a dishonest one. Visa’s guide lists “Customers not recognizing the business name on their statement” among the common causes. Reach out, and if the customer agrees the charge was right, ask them to withdraw the dispute with their bank. But do not stop there. Stripe says you must still submit evidence, because “Many card issuers treat failure to submit evidence as an acceptance of liability on your part.” For a withdrawal to count under Visa’s rules where it applies, you need a dated message from the cardholder, sent after the dispute began, that clearly says they accept the charge and identifies it. Also note that on Stripe you cannot issue a refund outside the dispute process while it is open.

If the customer has a fair point, fixing it or refunding the right amount is often cheaper than the fees and the time. Accepting a dispute you would lose is a business decision, not a defeat.

Cutting the risk at the start

• Make the name on the customer’s statement one they will recognize: the business name on your trucks, not a holding company.
• Put the scope, the price and your cancellation and refund terms in writing, and get them accepted before you take money.
• Read the card with chip or tap when you can; Visa’s advice is to “electronically read the card rather than key-entering transaction information.”
• Never write a card number down to run later; see Taking Card Payments Safely.
• Send a receipt every time, and photograph the finished work before you load the truck.
• Answer complaints fast, and refund promptly when a refund is owed.

If you send estimates from the office, the part of our tools that runs jobs and invoices, the customer accepts by typing their name on the emailed link and the job moves to accepted with the agreed price on it, which gives you a written record of what was agreed. It is not a signed contract, so keep the signed contract your state requires as well.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.