Your financial statements should tell the true story of your business’s health. But if you’re just subtracting disputes from your sales column, you’re missing a critical chapter. Chargebacks do more than just reverse a sale; they introduce hefty fees, drain operational resources, and can even put your merchant account at risk. Proper chargeback accounting is the practice of correctly recording these events to reflect their true financial impact. It ensures your revenue recognition is compliant and your profitability analysis is accurate. Getting this right is fundamental for making sound strategic decisions, passing audits with confidence, and truly understanding where your money is going.

Key Takeaways

• Track chargebacks as a separate expense, not a sales reduction: To keep your revenue reporting accurate, log disputes in Accounts Receivable. This method correctly accounts for the lost sale, associated fees, and product costs, giving you a true picture of their financial impact.
• Focus on prevention to reduce disputes at the source: The best way to manage chargebacks is to stop them from happening. Simple actions like using clear billing descriptors, making customer service easy to reach, and implementing fraud detection can significantly lower your dispute rate.
• Standardize your response with clear protocols and automation: Create a consistent process for every dispute, from collecting evidence to deciding whether to fight. Using automated tools to track deadlines and integrate with your accounting software will save time, reduce errors, and improve your win rate.

What Is Chargeback Accounting?

Let’s get straight to it: chargeback accounting is the process of tracking and managing customer-disputed transactions within your financial records. When a customer disputes a charge with their bank, it sets off a chain reaction that can easily tangle your books if you’re not prepared. It’s more than just noting a lost sale; it involves recording the reversal, accounting for associated fees, and reconciling everything to ensure your financial statements are accurate.

For businesses with a high volume of transactions, this can quickly become a major headache. Each chargeback isn't just a single reversed entry. It's a multi-step process that impacts your revenue, your fees, and your overall financial health. Getting chargeback accounting right is fundamental to understanding your true profitability and making sound business decisions. Without a clear system, you risk operating with skewed data, which can lead to inaccurate financial reporting and missed growth opportunities. Properly managing this process is a key part of maintaining a healthy business, and you can find more insights in the HubiFi Blog to keep your financial operations sharp.

How the Chargeback Process Works

When a customer decides to dispute a transaction, it kicks off a formal process that directly involves their bank and you, the merchant. It’s not as simple as a customer asking for their money back. Instead, it follows a few key steps. First, the customer contacts their card-issuing bank to report an issue with a charge. The bank then initiates the chargeback, pulling the funds from your merchant account.

At this point, you’re notified and given a chance to respond. This is where you can fight the chargeback by providing evidence that the transaction was legitimate—a process called representment. After you submit your proof, the bank reviews everything and makes a final decision. Understanding this chargeback process is the first step toward managing it effectively.

Chargebacks vs. Refunds: What's the Difference?

It’s easy to lump chargebacks and refunds together, but they are fundamentally different, and that distinction matters for your accounting. A refund is a transaction between you and your customer. The customer requests their money back, you agree, and you initiate the return of funds. You’re in control of the process, and it’s typically resolved within a few days.

A chargeback, on the other hand, is initiated by the customer through their bank, cutting you out of the initial decision. The bank forcibly removes the money from your account, and you have to prove the charge was valid to get it back. This process is controlled by the bank and can take weeks or even months to resolve. Because chargebacks come with extra fees and risk, they have a much bigger impact on your bottom line.

How Chargebacks Affect Your Financials

The financial sting of a chargeback goes far beyond the initial sale amount. In fact, the true cost can be more than double the original transaction value. First, you lose the revenue from the sale itself. Then, you’re out the cost of the product or service you already provided, plus any shipping expenses. On top of that, your payment processor will hit you with a separate chargeback fee, which can range from $20 to $100 per dispute.

These direct costs add up quickly and can seriously eat into your profit margins. If they aren't tracked correctly, they can distort your financial data, making it difficult to gauge your business's performance. If you're struggling to get a clear picture of how these disputes impact your revenue, you can schedule a demo with HubiFi to see how automated revenue recognition can help.

Uncover the True Cost of Chargebacks

When a customer files a chargeback, it’s easy to see the lost sale and feel the sting. But that initial transaction amount is just the tip of the iceberg. The true financial impact ripples through your business, adding up to a figure that can be surprisingly high. Many businesses make the mistake of only tracking the lost revenue, which leaves a major gap in their financial reporting and strategic planning. A complete picture includes a mix of direct losses, punitive fees from processors, operational drains on your team's time, and serious long-term risks to your ability to even process payments. Getting a handle on these total costs is essential for accurate accounting and building a resilient business. It allows you to see the full story behind each dispute and make smarter decisions about prevention and response. Before you can build a strategy to fight chargebacks, you first need to quantify their total damage to your bottom line. Let's break down exactly what a single chargeback can cost you.

Direct Financial Losses

The most obvious hit from a chargeback is the loss of the sale itself. But it goes deeper than that. The true cost can be more than double the original transaction value. You don't just lose the revenue; you also lose the cost of the goods you sold and any shipping fees you paid to get the product to the customer. Think about it: the product is gone, the shipping cost is sunk, and the money you thought you earned has been pulled back from your account. For businesses with tight margins, this combination of lost revenue and sunk costs can turn a profitable sale into a significant financial loss.

Fees, Fines, and Penalties

On top of losing the sale, your payment processor will hit you with a separate chargeback fee. This isn't a refund; it's a penalty. These non-refundable fees for each chargeback can range anywhere from $15 to over $100, depending on your processor and your history. If you face a high volume of chargebacks, these fees alone can become a major expense line on your profit and loss statement. It’s a direct penalty for the dispute, regardless of whether you eventually win or lose the case. This is a crucial number to track, as it represents a pure cost with no associated revenue.

The Hidden Costs to Your Operations

Beyond the direct financial hits, chargebacks drain your most valuable resource: time. The operational cost of managing a dispute is significant. Every chargeback requires your team to stop what they're doing and pivot to damage control. This involves investigating the claim, gathering evidence like receipts and communication logs, writing a rebuttal letter, and submitting it all before the deadline. This administrative burden represents real payroll hours that could have been spent on growing the business. This investment of time and effort is an indirect cost that eats into your team's productivity and your overall profitability.

Risks to Your Merchant Account

Perhaps the most dangerous cost is the long-term risk to your merchant account. Payment processors like Visa and Mastercard monitor your chargeback ratio—the number of chargebacks you receive relative to your total transactions. If this ratio gets too high, you can be placed in a high-risk monitoring program, which comes with even higher fees and fines. If the problem persists, the processor can terminate your merchant account entirely, making it nearly impossible to accept credit card payments. When a chargeback is lost, it also becomes a formal accounting entry. You'll need to move the loss from accounts receivable to an expense account, often as uncollectible debt.

How to Properly Account for Chargebacks

When a chargeback hits, it’s easy to feel like you’ve just lost a sale. But from an accounting perspective, it’s not that simple. Just subtracting the amount from your revenue can distort your financial reports and hide the true impact of disputes on your business. Treating chargebacks with a clear, consistent process is the only way to maintain accurate books and get a real picture of your financial health.

Properly accounting for chargebacks means you can track them accurately, fight them effectively, and understand their total cost. It’s a non-negotiable part of financial management, especially for businesses handling a high volume of transactions. This process ensures your financial data remains reliable, which is critical for everything from securing a loan to passing an audit. It moves chargebacks from being a frustrating surprise to a manageable part of your operations. Here’s how to get it right.

Best Practices for Recording Chargebacks

Your first instinct might be to deduct a chargeback directly from your sales revenue. It feels logical, but it muddies your financial data. A better approach is to treat the disputed amount as money owed to you. Instead of reducing your income, you should record the chargeback in your accounts receivable (A/R). This simple shift keeps your sales reports and income statements accurate and consistent.

Think of it this way: the sale happened, and the revenue was earned. The chargeback is a separate event—a potential debt. By logging it in A/R, you create a clear trail for the dispute without altering your historical sales data. This method ensures your top-line revenue figures remain clean, giving you a more precise view of your sales performance. Many modern accounting platforms offer seamless integrations that can help automate this workflow, ensuring every chargeback is categorized correctly from the start.

What Documentation You Need to Keep

Winning a chargeback dispute often comes down to the quality of your evidence. That’s why meticulous documentation is your best friend. As soon as a chargeback is initiated, you should start building a case file. Be thorough and save everything related to the original transaction and the dispute itself. This isn't just for fighting the chargeback; it's also essential for your internal records and any future audits.

Your documentation should include the original sales receipt, the date and amount of the transaction, and a breakdown of any associated fees. Keep copies of all communication with the customer, the bank, or the payment processor. Detailed notes on every action you take are also crucial. Having this information organized and accessible not only strengthens your position in a dispute but also provides valuable insights into why chargebacks are happening in the first place.

How to Reconcile Chargeback Disputes

Once you’ve recorded the chargeback in accounts receivable and gathered your documentation, the next step is reconciliation. Your accounting entries will depend on the outcome of the dispute. If you successfully challenge the chargeback and the funds are returned, you can simply clear the entry from your accounts receivable. Your books are now balanced, and the case is closed.

However, if you lose the dispute, you’ll need to write off the loss. You can’t leave it in A/R forever, as it’s no longer money you can expect to receive. To do this, you’ll move the amount from accounts receivable to an expense account. You can label this account "bad debt" or "chargeback losses." This correctly reflects the loss on your income statement as an expense of doing business, rather than as a reduction in revenue. If managing these workflows becomes overwhelming, you can always schedule a demo to see how automation can simplify the process.

Stay Compliant with Accounting Standards

Following these steps isn’t just about keeping tidy books—it’s about staying compliant with accounting principles like ASC 606. Accurate chargeback accounting is essential for a true and fair view of your company's financial position. When you properly account for disputes, you get a clear-eyed look at their real impact, from lost revenue and fees to operational costs. This financial clarity is vital for strategic decision-making, from pricing and product development to customer service policies.

Ultimately, a disciplined approach to chargeback accounting helps you understand the story your numbers are telling. It ensures your financial statements are audit-ready and provides the data you need to manage risk effectively. By mastering revenue recognition for every scenario, including chargebacks, you build a more resilient and financially sound business.

Tackle Common Chargeback Challenges

Chargebacks come with their own set of headaches, but you can manage them without derailing your financial operations. Most businesses run into the same few obstacles when trying to get a handle on chargeback accounting. By understanding these common pain points, you can create a clear strategy to address them head-on, protecting your revenue and keeping your financial data clean. Let's walk through the most frequent challenges and how you can solve them.

Handle High-Volume Transactions

If your business processes hundreds or thousands of transactions a day, manually tracking chargebacks is simply not an option. The sheer volume makes it impossible to investigate each dispute thoroughly, leading to lost revenue from winnable cases. This is where automation becomes essential. Instead of having your team sift through endless transaction logs, chargeback management software can automatically flag disputes, gather initial evidence, and streamline the response process. This frees your team from tedious manual work and ensures no dispute falls through the cracks. The right system provides seamless integrations with your payment processors and sales platforms to create a single, manageable workflow.

Address Timing and Recognition Issues

One of the trickiest parts of chargeback accounting is the timing. A sale is recorded in one accounting period, but the chargeback might not arrive until weeks or even months later. When you simply deduct the chargeback from your current income, it creates a mismatch that skews your financial reports. Your sales data won't align with your bank statements, making it difficult to get an accurate picture of your monthly performance. Proper accounting requires you to match the chargeback to the original transaction period. This ensures your revenue recognition is compliant and your financial insights are based on accurate, period-specific data.

Work with Third-Party Processors

Many businesses rely on third-party platforms like delivery apps, marketplaces, or external payment gateways. While these services expand your reach, they can complicate chargeback management. You often have less control over the dispute process and receive monthly reports that are difficult to decipher and reconcile with your own records. This lack of transparency can make it tough to track chargebacks accurately and fight them effectively. The key is to implement a system that can consolidate data from these third-party sources. By getting a clear view of your data across all platforms, you can properly account for every chargeback, regardless of where the transaction originated.

Allocate Your Resources Effectively

Dealing with chargebacks isn't just a financial drain; it's an operational one. Every hour your team spends gathering evidence, writing rebuttals, and tracking disputes is an hour they aren't spending on customer service, marketing, or other growth-focused activities. Manually managing chargebacks pulls valuable resources away from what they do best. Automating your chargeback accounting process allows you to protect your revenue without the heavy operational lift. It reduces overhead costs and lets you reallocate your team’s time and energy toward initiatives that actively grow your business, making your entire operation more efficient and profitable.

How to Prevent Chargebacks and Manage Risk

While dealing with chargebacks is a necessary part of business, the best defense is a great offense. Shifting your focus from reacting to disputes to proactively preventing them can save you an incredible amount of time, money, and stress. You can’t stop every single chargeback, but you can build a strong framework that significantly reduces their frequency and impact. For high-volume businesses, this isn't just a best practice—it's essential for maintaining healthy profit margins and operational stability. It all comes down to a few key areas: implementing the right technology, communicating with absolute clarity, being accessible to your customers, and using your own data to get smarter over time.

Putting these strategies into practice creates a more secure and trustworthy experience for your customers, which is always good for business. When customers feel confident and supported, they are far less likely to resort to a chargeback to solve a problem. These preventative measures are foundational to maintaining a healthy merchant account and protecting your bottom line. By taking control of the process, you can turn a major financial headache into a manageable, and minimal, part of your operations. For more ways to improve your financial operations, you can find plenty of insights on our blog.

Use a Fraud Detection System

Think of a fraud detection system as a digital bouncer for your transactions. These systems are designed to spot trouble before it walks through the door. By analyzing hundreds of data points in real-time—like IP address, location, and transaction history—they can flag potentially fraudulent purchases instantly. This allows you to review or block a suspicious order before it’s even processed, stopping a chargeback before it can ever happen. Implementing a robust fraud detection tool is one of the most effective steps you can take to protect your business from criminal fraud. Many of these tools work through seamless integrations with your existing payment and accounting software, making them a powerful addition to your tech stack.

Create Clear Billing Descriptions

Have you ever checked your credit card statement and seen a charge from a company you didn’t recognize? Your first instinct is probably to call your bank. This exact scenario leads to countless "friendly fraud" chargebacks, where legitimate customers dispute a charge simply because they don't recognize the billing description. You can prevent this easily by making sure your billing descriptor—the text that appears on a customer's statement—is crystal clear. It should prominently feature your company name and, if possible, a hint about the product or service. This small bit of transparency helps customers connect the charge to their purchase, eliminating confusion and unnecessary disputes.

Improve Your Customer Communication

Often, a chargeback is a final cry for help from a customer who feels they have no other option. If a customer can't easily find a way to contact you about a problem, they are much more likely to go straight to their bank. This is why excellent, accessible customer service is a cornerstone of chargeback prevention. Make your contact information—phone number, email, and chat support—easy to find on your website. More importantly, be responsive. A quick and helpful reply that resolves a customer's issue can stop a dispute in its tracks and even turn a frustrated customer into a loyal one. This proactive approach shows you value your customers and are committed to resolving issues fairly.

Analyze Data to Spot Trends

Your own transaction and chargeback data is a goldmine of information. By analyzing this data, you can uncover patterns that point to specific vulnerabilities. Are you seeing a spike in chargebacks for a certain product? From a particular geographic region? Or tied to a specific marketing campaign? Identifying these trends allows you to move from a general prevention strategy to a highly targeted one. For example, you might decide to require more verification for purchases from a high-risk area. Using analytics to understand the "who, what, and why" behind your chargebacks helps you make smarter, data-driven decisions to mitigate future risk. If you want to see how powerful data can be for your business, you can schedule a demo with our team.

Streamline Your Chargeback Management Process

Dealing with chargebacks can feel like you’re constantly putting out fires. With a solid system, you can move from a reactive scramble to a proactive approach that saves time and protects your financial health. It all comes down to having clear steps for your team to follow, from the moment a dispute arises to its final resolution. Let’s walk through how to build that process.

Train Your Team

Chargebacks aren't just a finance problem; they impact customer service, sales, and operations. That’s why your first step is getting everyone on the same page. When your team understands how chargebacks work, they can communicate more effectively to resolve them. Make sure everyone knows the common reasons for disputes and their role in prevention. A simple playbook or a quick training session can make a huge difference in aligning your team. For more tips, you can find helpful insights in the HubiFi blog.

Build an Evidence Collection System

When a chargeback hits, you need compelling evidence to dispute it—fast. A dedicated collection system is essential. The key is to "document everything: Identify the original sale, note the date, amount, and any fees." This includes customer emails, shipping confirmations, and delivery photos. By setting up seamless integrations with HubiFi, you can automatically pull data from your various systems, ensuring you have a complete evidence file ready to go without the manual scramble. This saves critical time when you're up against a deadline.

Define Your Response Strategy

You don’t have to fight every single chargeback. A smart response strategy helps you decide which disputes are worth your time. If you successfully fight a chargeback, it's called a reversal, and the money is returned to you. Create clear guidelines for your team. For example, you might automatically accept disputes under a certain dollar amount but always fight those with specific reason codes where you have strong evidence. This strategic approach helps you focus your efforts where they’ll have the most impact on your bottom line.

Establish Clear Resolution Protocols

How you record a chargeback is just as important as how you fight it. For clean financial reporting, you need clear accounting protocols. Instead of reducing your sales numbers, you should record chargebacks in your accounts receivable. This approach "keeps your sales reports and income statements accurate and matching." It ensures your revenue figures reflect actual sales while the chargeback is tracked separately until resolved. This method provides a transparent view of your financial performance and makes reconciliations much smoother. If you're unsure how to set this up, you can always schedule a demo with HubiFi to see how automation can help.

Find the Right Tools for Chargeback Management

Manually tracking chargebacks in a spreadsheet is a recipe for headaches and lost revenue. When you’re dealing with a high volume of transactions, you need a system that can keep up. The right tools don’t just help you fight disputes; they streamline your entire chargeback accounting process, from the initial claim to the final reconciliation. Think of it as your command center for managing disputes, giving you the power to automate tedious tasks, gather evidence, and gain a clear view of your financial health.

Investing in chargeback management software is one of the smartest moves you can make to protect your bottom line. These platforms are designed to handle the complexities of the dispute process, ensuring you meet tight deadlines and submit compelling evidence. More importantly, they turn raw data into actionable insights, helping you understand why chargebacks are happening in the first place. By choosing the right tools, you can shift your focus from simply reacting to disputes to proactively preventing them. Let’s look at the key features you should look for.

Integrate with Your Accounting Software

Your chargeback management system shouldn't live on an island. To get a true picture of your financials, it needs to communicate directly with your accounting software. When these systems are connected, chargeback data flows automatically, eliminating manual data entry and the risk of human error. This ensures your financial records are always accurate and up-to-date, which is essential for closing your books quickly and confidently. Having seamless integrations means your revenue, fees, and recovered funds are all accounted for in one place, giving you a reliable, audit-ready financial overview without the extra work.

Automate Your Tracking

The clock starts ticking the moment a chargeback is filed. Automation is your best friend for managing these tight deadlines. Chargeback management software can automatically flag new disputes, gather initial evidence, and send alerts to your team so nothing falls through the cracks. Instead of manually tracking each case in a spreadsheet, you can rely on an automated system to monitor statuses, deadlines, and outcomes. This efficiency doesn't just save time; it directly impacts your win rate. By automating the tracking process, you free up your team to focus on building stronger dispute cases and analyzing long-term trends.

Use Analytics and Reporting

Winning a dispute is good, but preventing one is even better. The best chargeback tools offer robust analytics and reporting features that help you uncover the root causes of your disputes. With real-time dashboards, you can spot trends, like which products are most frequently associated with chargebacks or which dispute reasons are most common. This data is invaluable for making strategic decisions, whether it's clarifying product descriptions or improving your customer service policies. When you can see the "why" behind your chargebacks, you can take targeted action to fix the underlying issues. You can schedule a demo to see how powerful these analytics can be in practice.

Plan Ahead with Forecasting Tools

Truly advanced chargeback management moves beyond reaction and into prediction. Some tools use historical data and machine learning to forecast your chargeback risk. This allows you to identify potential issues before they escalate into full-blown disputes. For example, forecasting might highlight a sudden spike in claims from a specific region or for a particular product, prompting you to investigate proactively. By learning from past data to anticipate future challenges, you can implement preventative measures that protect your revenue and your merchant account. This forward-thinking approach turns chargeback management from a defensive chore into a strategic advantage.

Implement Strong Internal Controls

Think of internal controls as the playbook for your financial operations. They aren't just about reacting to problems; they're about building a strong, resilient system that minimizes risk from the start. When it comes to chargebacks, having solid controls in place means your team knows exactly what to do, how to do it, and when. This consistency is crucial for defending against disputes, maintaining accurate financial records, and protecting your revenue. A well-designed system ensures that every chargeback is handled with the same level of rigor, from initial documentation to final resolution.

This framework does more than just help you win disputes. It creates a culture of accountability and provides a clear audit trail for every transaction. By standardizing your processes, you reduce the chance of human error and give yourself the data needed to spot problematic trends before they escalate. Strong internal controls turn chargeback management from a chaotic fire drill into a predictable, manageable process. You can find more tips for strengthening your financial operations on the HubiFi blog. Ultimately, these controls are fundamental to scaling your business profitably and maintaining healthy relationships with both customers and payment processors.

Set Clear Documentation Standards

Your best defense in a dispute is a rock-solid paper trail. That’s why establishing clear documentation standards is non-negotiable. Your team needs a consistent, repeatable process for every single transaction and chargeback. This means you should "document everything: identify the original sale, adjust your sales, record fees, update inventory, keep detailed notes, and review often." Create a simple checklist that outlines exactly what information to save, such as customer communications, shipping confirmations, and delivery proof. When documentation is standardized, you can quickly pull together compelling evidence, ensure your accounting is accurate, and make internal reviews much more straightforward.

Automate Key Processes

Manually managing chargebacks is a huge drain on your team's time and energy, especially as your business grows. This is where automation becomes a game-changer. Chargeback management software can handle the repetitive, time-consuming tasks, freeing your team to focus on more complex issues. Automation can flag suspicious orders, gather initial evidence for disputes, and even update your accounting records in real time. By connecting your systems, you create a seamless flow of information that reduces errors and improves your response times. The right integrations with HubiFi can connect your payment processor, CRM, and accounting software to make this process even more efficient.

Conduct Regular Internal Audits

You can’t fix problems you don’t know you have. Regular internal audits are like a health check for your chargeback management process. Set aside time each month or quarter to review your chargeback data and look for patterns. Are certain products consistently linked to disputes? Are most chargebacks coming from a specific location? As experts advise, you should "regularly check your chargebacks to find patterns or common problems." Answering these questions helps you identify the root causes of your chargebacks, whether it’s an unclear product description, a shipping delay, or a gap in your fraud prevention. These audits provide the insights you need to make proactive changes and reduce future disputes.

Track Key Performance Metrics

If you aren't tracking your performance, you're essentially flying blind. To understand what’s working and what isn’t, you need to monitor key performance metrics (KPIs). The most important ones include your chargeback rate (the percentage of transactions that result in a chargeback), your win-loss ratio for disputes, and trends in reason codes. Using a platform that can aggregate this data and generate reports in real time is essential for effective management. These metrics give you a clear picture of your performance and highlight areas for improvement. With this data, you can make informed, strategic decisions to protect your revenue and schedule a demo to see how enhanced data visibility can help.

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Frequently Asked Questions

Why can't I just subtract a chargeback from my sales revenue? It’s a tempting shortcut, but it gives you a distorted picture of your business's health. When you deduct a chargeback directly from sales, you hide the true cost of the dispute and make your sales performance look weaker than it actually is. By recording it in accounts receivable instead, you preserve the accuracy of your sales data and properly track the chargeback as a separate financial event—a potential debt—which includes associated fees and operational costs.

What's the most important thing to do the moment a chargeback is filed? Before you even decide whether to fight it, your immediate priority should be documentation. Start a dedicated file for that specific dispute and gather every piece of related evidence you have: the original receipt, shipping confirmations, delivery proof, and any emails or communication with the customer. Having this information organized and ready is critical for building a strong rebuttal and is essential for accurate accounting, regardless of the outcome.

Is it always worth the effort to fight a chargeback? Not necessarily, and it’s smart to be strategic about it. For a low-value transaction, the time and resources your team spends fighting the dispute might cost more than the chargeback itself. It’s better to establish a clear policy. For example, you might decide to automatically accept disputes under a certain dollar amount but always fight larger claims where you have solid evidence. This helps you focus your energy where it will have the greatest financial impact.

My business is growing fast. When should I stop using spreadsheets and get a real tool for this? The moment you start missing deadlines or feel like you can't give each dispute the attention it deserves, it's time to upgrade. If your team is spending more time chasing down paperwork for chargebacks than focusing on growing the business, a manual system is already costing you money. Investing in an automated tool isn't just about convenience; it's about protecting your revenue and ensuring your financial data is accurate as you scale.

What’s the difference between preventing fraud and preventing chargebacks? Think of it this way: fraud prevention is about stopping criminals from making unauthorized purchases with stolen information. Chargeback prevention is a much bigger umbrella. It includes stopping fraud, but it also focuses on preventing legitimate customers from filing disputes out of confusion or frustration. This involves things like writing clear billing descriptions, providing excellent customer service, and setting accurate product expectations—all of which stop disputes before they start.