What Is a Chargeback?

A chargeback is when a cardholder disputes a payment with the bank that issued their card, and the bank reverses the money. Stripe calls it a dispute that "occurs when a cardholder questions your payment with their card issuer". The issuer pulls the sale amount back from you, plus a network fee, often before you can respond. In Malaysia, card sales carry this risk, while FPX bank transfers do not.

How a chargeback works

A chargeback starts with the customer, not you. The cardholder contacts their issuing bank and disputes a charge, and the bank opens a formal dispute on the card network.

That dispute reverses the payment straight away. The money for the sale, plus one or more network dispute fees, is pulled from your payment provider. It then debits your account, per Stripe's disputes documentation (retrieved August 2026).

You are not powerless, but you are on the back foot. You can accept the dispute, or challenge it by submitting evidence such as delivery proof, order records, and messages.

The cardholder's bank decides the outcome, and it can take up to three months. The fee for receiving the dispute is not refunded even if you win, so a chargeback costs you something either way.

Chargeback versus refund

A chargeback and a refund both return money to a buyer, but they are not the same thing. The difference is who starts it and who controls it.

	Refund	Chargeback
Who starts it	You, the seller	The cardholder, via their bank
Control	Yours; voluntary	The bank's; forced on you
Extra fee	None	A network dispute fee, often non-refundable
Speed	Immediate, on your terms	Weeks to months, decided by the cardholder's bank
Signal	Normal customer service	Counts against your dispute rate

Source: Stripe disputes documentation (docs.stripe.com/disputes, retrieved August 2026).

A refund is simply good service on your terms. A chargeback is a dispute you did not choose, and too many can put your payment account itself at risk.

Why do chargebacks happen?

Chargebacks fall into a few common categories, and card networks group disputes by reason. Knowing the reason tells you whether it was fraud or a fixable service problem.

The usual reasons are fraud, where the real cardholder did not authorize the payment. Others include a product not received, a product not as described, a duplicate charge, or a credit that was never processed.

Some are genuine fraud you can only screen against. Many, though, are "friendly fraud", where a real customer forgets a purchase or disputes it instead of asking you for a refund.

That is why clear billing descriptors and fast support cut chargebacks. A buyer who recognizes the charge and can reach you rarely calls the bank first.

Why FPX and DuitNow avoid it

FPX and DuitNow transfers cannot be charged back, which is a real advantage for a Malaysian store. The buyer logs into their own bank and approves the exact amount, so there is no card issuer to reverse the payment later.

That structural point matters for your risk. A card sale carries fraud and dispute exposure that a bank transfer simply does not, part of why cards and FPX are priced so differently.

It does not mean you should drop cards. Cards are convenient and expected, especially for stores using Stripe and for overseas buyers. Whether you need a full checkout at all is a separate call, weighed in e-commerce or a catalog.

The practical move is to offer both. Let large or local payments run through FPX or DuitNow QR, where there is nothing to charge back, and keep cards for the buyers who want them.

How to reduce chargebacks

You reduce chargebacks by removing the reasons a buyer would dispute a charge. Most of them are preventable with clear records and clear communication.

Use a billing descriptor the customer will recognize on their statement. Confirm every order by email, and keep proof of delivery.

Answer support fast, so an unhappy buyer reaches you before the bank. Clear checkout and follow-up also cut abandoned carts, the same trust work that heads off disputes.

We show clients the compulsory, optional, and potential costs upfront. For a site that takes cards, that list includes this one: a completed card sale is not final money, because a chargeback can reverse it months later. Building that into pricing and cash flow keeps a bad month from becoming a surprise.

Frequently asked questions

What is the difference between a chargeback and a refund?

A refund is money you send back voluntarily, on your terms, with no extra fee. A chargeback is forced on you by the customer's bank after they dispute a charge, it reverses the payment, and it usually adds a non-refundable network fee. A refund is normal customer service; a chargeback counts against your dispute rate and, in volume, can threaten your payment account.

Do chargebacks cost the seller money?

Yes. When a chargeback is filed, your provider pulls back the sale amount and charges a dispute fee. The fee for receiving the dispute is not returned even if you win the case. So a single disputed sale can cost you the goods, the payment, and the fee. This is why preventing chargebacks matters more than winning them, since even a win is not free.

Can I get a chargeback on FPX or DuitNow?

No. FPX and DuitNow are bank transfers where the buyer approves the exact amount from their own account, so there is no card issuer that can reverse the payment. That makes them lower-risk for sellers than cards. The trade-off is that a bank transfer has no built-in buyer protection, so offer both and let each customer choose the method they trust.

How long does a chargeback take?

Weeks, sometimes up to three months. The payment reverses quickly when the dispute is filed, but the final decision rests with the cardholder's bank, on its timeline, not yours. During that window you gather and submit evidence, then wait for the bank to rule. Because the process is slow and the fee sticks either way, preventing disputes beats fighting them after the fact.

How do I win a chargeback dispute?

By submitting strong evidence quickly. Proof of delivery, a signed or tracked shipment, order and customer records, and any messages showing the buyer received what they paid for all help. Respond within your provider's deadline, since a late response is an automatic loss. Even so, some disputes are unwinnable, so clear descriptors and fast support to prevent them are your best defense.

Building a checkout that protects you

Storming Solutions builds business websites for Malaysian companies from Kuala Lumpur. Where a site takes payments, we wire the payment side to match your risk, not just accept every card blindly. We set up FPX and DuitNow for the payments that should not be charged back, and cards for the buyers who want them, with the trade-offs laid out first.

Worried about disputes eating into your store's takings? Talk to us about your setup, or see how we handle web development and payments together.