What to Do When a Customer Disputes a Charge Through Their Credit Card

The reversal you didn't expect

You completed a job. The customer paid by credit card. Three weeks later you receive a notification from your payment processor: the customer has disputed the charge. The funds have been temporarily reversed while the dispute is reviewed.

This is a chargeback. It's increasingly common — and increasingly weaponised — in the consumer services space. Customers sometimes initiate chargebacks in lieu of having a difficult conversation, or as leverage in a dispute over quality or scope.

Understanding how chargebacks work and how to respond gives you the best chance of winning.

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How the chargeback process works

1. The customer contacts their card issuer and claims the charge was unauthorised, the service wasn't provided, or the service was significantly not as described.

2. The card issuer temporarily reverses the charge (the funds leave your Stripe or payment processor account).

3. Your payment processor notifies you and gives you a window — typically 7–21 days — to respond with evidence.

4. You submit your evidence. The card issuer reviews both sides and makes a decision.

5. If you win, the funds are returned. If you lose, the reversal stands — and you may face an additional chargeback fee ($15–$25 per dispute).

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What evidence wins

The card issuer is looking for clear documentation that:

• A service agreement existed and was agreed to
• The service was delivered as agreed
• The customer acknowledged completion

Winning evidence:

• The signed estimate (with scope and terms clearly visible)
• Before-and-after photos showing the work performed
• The signed approval if using an e-signature system
• Communications showing the customer acknowledged the work (a text saying "looks great" is gold)
• The completion summary or sign-off document
• Any prior payments made without dispute (establishes an ongoing relationship)

Losing position:

• No signed agreement
• No documentation of service performed
• No customer acknowledgement of completion
• Only verbal commitments, nothing in writing

The pattern is consistent: contractors who win chargebacks have documentation. Contractors who lose don't.

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The fraudulent chargeback

Occasionally a customer files a chargeback in bad faith — they received the service and are attempting to get it for free. This is fraud, and while it's rare, it happens.

Your response is the same: thorough documentation. The card issuer is specifically looking for proof that the customer agreed to and received the service. A signed estimate, completion photos, and an email from the customer complimenting the work is an extremely strong case.

If you win a chargeback you believe was fraudulent, document the whole interaction. Repeated fraudulent chargebacks by a consumer can be reported and may result in card privileges being revoked.

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How to prevent chargebacks

Collect a signature on every job. A customer who has signed a written agreement is legally committed to the price and scope. Chargebacks based on "unauthorised charge" fail immediately when you produce a signature.

Collect deposits via the approval link. The same session that captures the signature captures the deposit payment — demonstrating the customer understood they were paying and for what.

Do a completion walkthrough. A customer who signed a completion walkthrough form has explicitly acknowledged the work was done. This is the single strongest piece of chargeback evidence available.

Get something in writing after. A text that says "everything looks great, thanks" takes 30 seconds to receive and can be worth hundreds of dollars in a dispute.

The practices that prevent chargebacks are the same practices that protect you in every other type of dispute: clear agreements, thorough documentation, and written acknowledgements at each stage.