Chargeback Time Limits For Cardholders and Merchants (Ultimate Guide)

Last year the global payments ecosystem had over 238 million chargebacks. This number is expected to reach 337 million by 2026, which is a 42% increase in just three years. 

Studies also found that the average chargeback rate is 0.56% of total sales. So for every 1,000 transactions processed, you can expect roughly 5 or 6 to get chargebacked. 

But there are rules and regulations that govern when a chargeback can be filed and how long a merchant has to respond. However, these rules aren’t always cut and dry—as they vary based on factors like the chargeback reason, card network, and local laws.

This ultimate guide contains everything you need to know about chargeback time limits for merchants and consumers alike. 

What is the Time Limit For Filing a Chargeback?

US law says that consumers can dispute a transaction up to 60 days after the credit card statement is issued. But banks and card networks typically allow cardholders to file a chargeback up to 120 days from the transaction date.

The federal law comes from the Fair Credit Billing Act (FCBA) of 1974. It states that only charges over $50 are eligible for a dispute, and if an unauthorized user purchases something with a credit card, the cardholder’s liabilities are capped at $50. Once a dispute has been made, the card issuer or lender has 30 days to acknowledge the response and then 90 days to complete an investigation. 

With that said, the credit card networks and banks have more consumer-friendly rules governing chargebacks and disputes transactions. Even though the law only protects consumers for 60 days, most credit card companies allow customers to dispute a transaction up to 120 days from the transaction date. 

Since merchants consent to the card network rules when they acknowledge and sign an agreement to accept those payment methods, they’ll be bound to those terms as well.

There are certain exceptions to these rules, which we’ll cover in greater detail later on. For example, if a consumer purchases a flight, hotel, or service today that won’t be rendered for another 6 months, they can dispute that transaction after 120 days if those services were never received. 

If you’re unsure whether or not a transaction is eligible for a chargeback, check our list of valid reasons to dispute a credit card charge. 

How Long Do Merchants Have to Respond to Chargebacks?

Depending on the card network and chargeback reason, merchants have 20-45 days to respond to a chargeback. Here’s a quick summary that outlines the rules for each credit card company:

Visa 

Merchants have 20 days to fight a Visa chargeback by submitting their case. Issuing banks have 20 days to initiate pre-arbitration after receiving documentation from the merchant. Once the pre-arbitration begins, either party can request arbitration within 10 days.

Whenever a Visa dispute moves to a new stage of the chargeback process, the issuing bank must provide documentation to the merchant and cardholder within five days that explains the reason for the decision. 

Mastercard

Mastercard provides merchants with 45 days to respond to chargebacks. If Mastercard requests additional information about a dispute, merchants have 18 days to respond and provide the requested information. 

The card issuer has 45 days to initiate pre-arbitration, and both the merchant or issuer can pursue arbitration within 45 days after a decision has been made. 

American Express

Businesses have 20 days to respond to an Amex chargeback. 

Since Amex is both a card network and an issuing bank, the chargeback process is a bit different from Visa and Mastercard. Any cardholder dispute typically begins with an inquiry to the merchant, which is when the 20-day response timeline is initiated. 

If this initial inquiry does not resolve the cardholder’s issue, then a chargeback will be filed. Once the chargeback is filed, merchants have an additional 20 days to respond. There is no pre-arbitration or arbitration process with Amex chargebacks. 

Discover

Discover gives merchants 30 days to respond to a chargeback. 

When a cardholder disputes a transaction, Discover may send an inquiry to the merchant before a chargeback gets filed. If this happens, the merchant has 20 days to respond to the Discover inquiry. 

Once a decision has been made, either party involved has 10 days to request arbitration. 

Visa Chargeback Time Limits For Cardholders

Depending on the reason for disputing a charge, Visa cardholders have up to 120 days to file a chargeback from the date of the transaction. But in a few instances, the chargeback timeline may be limited to just 75 days.

Visa cardholders have 120 days to file a chargeback for any of the following reasons:

• Fraudulent transaction
• Late presentment
• Inaccurate transaction code
• Wrong currency
• Wrong amount charged
• Incorrect account number
• Merchandise not received
• Defective or damaged goods
• Billed for a recurring transaction that was previously canceled

Visa limits cardholders to 75 days if the chargeback is related to these issues:

• Declined authorization
• No authorization
• Invalid data
• Card recovery bulletin for lost, stolen, or counterfeit cards

Mastercard Chargeback Time Limits For Cardholders

In the vast majority of cases, Mastercard gives cardholders a 120-day time limit to file a chargeback. However, if the chargeback reason is related to an account number not on file or a warning bulletin file, the time limit drops to 45 days.

Here are all of the other Mastercard chargeback reasons that have a 120-day time limit:

• Late presentment
• Incorrect currency
• ATM dispute
• Liability shift for PIN or chip transaction
• Transaction amount discrepancy
• No authorization
• Fraudulent transaction
• Questionable activity
• Product or service not as described
• Goods or services not rendered
• Credit not processed
• Billed for a canceled recurring transaction
• Credit posted as purchase

American Express Chargeback Time Limits For Cardholders

American Express gives cardholders up to 120 days from the transaction date to file a chargeback.

For damaged or defective goods, the time limit is 120 days from the date the goods were received. 

If goods or services were never received, Amex cardholders have 120 days to dispute a charge from the date that they expected to receive them or the date they were first notified that goods/services would not be received (whichever comes first).

Discover Chargeback Time Limits For Cardholders

Discover does not have a strict or specified timeline for cardholders to dispute a transaction. Instead, they review each dispute on a case-by-case basis to determine whether or not a chargeback is warranted.

However, Discover does recommend that cardholders file disputes within 120 days of the transaction. 

Factors That Impact Chargeback Time Limits

As previously mentioned, there isn’t a one-size-fits-all answer to how long a cardholder has to dispute a transaction and how long a merchant has to respond to the chargeback. There are several different factors that impact chargeback time limits, which I’ll break down below.

Card Network Rules

Every credit card network has its own rules that govern chargebacks. While most card networks give customers up to 120 days to dispute a transaction, there are a few instances where that time limit may drop to 45 or 75 days. The merchant’s time to respond also ranges from 20 to 45 days, depending on the card network rules.

Goods or Services Purchased

Purchases for less than $50 are not protected by the US Fair Credit Billing Act. The purchase amount won’t matter for the card network, but the type of goods or services purchased definitely have an impact on the time limit. For example, an item that’s purchased and delivered immediately differs from something purchased that has a future delivery date (like an online order or a vacation). 

Dispute Reason

Visa and Mastercard both have different timelines for specific chargeback reason codes. While most disputes fall within the 120-day chargeback period, some have a shorter deadline—ranging from 45 to 75 days. For more information on different dispute reasons, refer to our guides below:

• Visa Chargeback Reason Codes
• Mastercard Chargeback Reason Codes
• American Express Chargeback Reason Codes
• Discover Chargeback Reason Codes

Merchant’s Return Policy

Customers can’t just file a chargeback because they waited too long to return an item. So having a clear and customer-friendly return policy can impact whether or not a dispute is initiated in the first place. 

Local Laws

Ever-changing laws and regulations can affect the deadline for consumers to file a chargeback. This varies by region, and we don’t typically see state-specific laws for disputes. As of right now in the United States, the card networks actually have more consumer-friendly rules than the laws imposed at the federal and state levels. 

Bank-Specific Policies

Banks that issue cards on behalf of the card networks may have their own policies that extend chargeback timelines for customers. We’ve seen these policies extend anywhere from 180 days from the purchase date up to one year. 

Final Thoughts

Chargebacks are a growing problem for merchants in nearly every industry. Since the card networks and issuing banks make it easy for their customers to dispute transactions, the merchant often gets the short end of the stick. 

That said, both cardholders and merchants need to be aware of the different chargeback time limits as it can impact whether or not a dispute is ruled in your favor.

For cardholders, make sure you understand the timeline you have to initiate a dispute—as it can vary depending on what card you’ve used to purchase something and when you expect to receive the goods or services you’ve purchased. Just don’t be lazy and initiate a chargeback because you forgot to return an item. Unless you suspect that your card has been compromised by a fraudster, you should always reach out to the merchant before you contact your bank. 

For merchants, your deadlines for responding to chargebacks and requests from the card networks are much stricter. In some instances, you only have 10 days to provide additional information and as few as 20 days to respond to a chargeback. So be diligent about any notifications you’re receiving from the card network and banks, as failing to respond promptly is the quickest way to lose a dispute.