You did the right thing. A customer complained, you issued the refund, and figured that was the end of it. But then a chargeback came through anyway, pulling the same amount of money out of your account, plus a fee. How is that even possible?
If you’ve been blindsided like this, you’re not alone. In forums and merchant groups, this problem comes up again and again. And it’s not just frustrating, it’s also expensive. Most merchants lose these cases unless they know exactly how to fight back.
Let’s walk through why it happens, what to show the bank, and how to talk about it in your chargeback response.
Why Refunds Don’t Always Stop Chargebacks
Here’s what usually goes wrong:
- Timing mismatch: You refund the payment, but the customer files a chargeback before the refund settles. Banks don’t always catch that the refund already went through.
- Miscommunication: The customer may not understand that a refund was already issued or may be trying to get double their money back.
- Auto-response tools: Some banks automatically push through a dispute if a customer even questions the charge, especially with card-not-present transactions.
- Processor confusion: If the refund and chargeback aren’t clearly linked in your processor’s data, the system won’t block the chargeback automatically.
You’d think issuing a refund is enough. But unless the customer calls their bank and cancels the dispute (which they rarely do), it often moves forward anyway.
What Evidence to Show (And How to Present It)
Just sending a screenshot of your refund system isn’t always enough. Here’s how to strengthen your case:
1. Proof of Refund with Dates
Use a system-generated receipt that clearly shows:
- The refund date
- The refunded amount
- The original transaction ID
Make sure the document connects the refund directly to the original purchase.
2. Matching Payment Processor Logs
Get internal logs from your gateway or processor. You want something that shows both:
- The original authorization
- The full or partial refund
Highlight that both transactions share the same card number and reference ID.
3. Communication with the Customer
Attach support tickets, emails, or chat transcripts. Anything that shows you addressed the issue and refunded the payment can help.
Even if the customer didn’t respond, showing you were proactive adds credibility.
4. Your Refund Policy
Include a copy of your refund terms, especially if your site says refunds can take 5–10 days. This can counter the argument that the customer didn’t see their money and assumed fraud.
What to Say in Your Rebuttal Letter
Here’s an example response you can customize when it comes to drafting your chargeback rebuttal letter:
“The customer was issued a full refund on [date], which was processed back to the original payment method. This refund occurred before the chargeback was filed, as shown in the attached processor documentation. We’ve also included internal logs and the refund receipt. We request that the chargeback be reversed as the funds were already returned to the customer.”
Keep it short, clear, and supported by evidence. Avoid emotional language or blaming the customer. Focus on dates and facts.
How Banks Still Get It Wrong
Even with great evidence, banks don’t always side with you. Why? A few reasons:
- Overloaded systems: Issuers may not take the time to review every detail, especially if it looks like a standard fraud case.
- Automation errors: Some banks use systems that automatically resolve in favor of the cardholder if the merchant doesn’t respond fast enough.
- Inconsistent review standards: What works for one issuer might not for another. Smaller banks tend to be more lenient with cardholders.
This is why it’s so important to build a bulletproof response package and follow up through your payment processor if the bank makes an error.
Testimonial: “We Refunded, Got Hit Anyway, Then Won It Back”
“We run a custom T-shirt shop and had a customer claim they never got their order. We refunded them that same day. A month later, the chargeback hit—and it wasn’t even flagged as a duplicate. Our gateway didn’t catch it, and we were out $60 plus the $25 dispute fee.
We submitted the refund receipt, processor logs, and our Shopify chat messages. We kept the response under 250 words. Two weeks later, we won it back.”
- Small business owner in Atlanta
Final Thoughts: Always Treat Refunds Like a Dispute
If you issue a refund, think of it as a preemptive chargeback. Save your documentation. Store receipts and internal logs. Track timing.
If a dispute comes in later, you’ll be ready to respond fast and with enough clarity to convince the bank.
Chargeblast Tip: Dispute Alerts Can Catch This Early
When you use a chargeback alert system, you’ll often get a heads-up before the chargeback is processed. That gives you a chance to show proof of refund before it escalates. Book a demo with Chargeblast today and see the difference for yourself.
