What is a chargeback?
When a payment is marked as a Chargeback in your Talo Payments account, it means the funds have been returned to your customer. Chargebacks typically occur when customers do not recognize a charge or believe the product/service was defective, not delivered, or not as described.
Unlike standard refunds (handled between you and the customer), chargebacks involve banks and payment networks (Visa, Mastercard, Amex, BNPL providers, etc.). Chargebacks begin with the customer and their card or BNPL provider.
Customers can generally initiate a chargeback:
Card payments: up to 120 days after settlement
BNPL payments: within 14 days
Talo is notified after the chargeback has already occurred and updates your dashboard as information becomes available.
Because chargebacks require time and resources from banks, payment networks, and processors, a chargeback fee applies.
You can dispute a chargeback by submitting supporting documents. If you win, the funds and the chargeback fee are returned to you.
Chargeback Fees
Region | Fee |
United States | 15.00 USD |
Canada | 15.00 CAD |
European Union | 15.00 EUR |
Switzerland | 15.00 CHF |
United Kingdom | 15.00 GBP |
If you dispute a chargeback and win, the chargeback fee is returned, along with the recovered payment amount.
Understanding Chargeback Reasons
When a customer initiates a chargeback, you’ll see the reason inside your Talo Payments dashboard.
Common reasons include:
Customer doesn’t recognize the payment
Customer claims they were charged more than once
Customer claims the item/service was not delivered
Customer claims they canceled a recurring payment
Customer claims the product/service was defective or not as described
Customer claims the product was counterfeit
Customer claims the sale terms were misrepresented
Customer claims they canceled or returned the purchase but weren’t refunded
Filing a Dispute Against a Chargeback
As the merchant, you may accept the chargeback or dispute it.
If you have valid evidence, a dispute is recommended—winning improves your chargeback ratio and protects your Talo Payments account.
Important
Many banks require evidence in English, unless the reviewing bank operates in another language.
To dispute a chargeback:
Go to Transactions in your dashboard.
Click the relevant payment.
Click Get Started.
Select Dispute Chargeback.
Choose the product/service type (physical, digital, service, event, other).
Enter a brief description of your business.
Submit:
A cover letter explaining your case
Supporting evidence
When ready, click Preview & Submit Dispute. You can also Save Draft and finish later.
Timeframe to Dispute a Chargeback
Different networks have specific dispute deadlines and resolution windows. Talo’s processors define the limits shown below, which may be shorter than the networks’ own maximums.
Chargeback Dispute Timeframes
Payment Network | Timeframe to Submit Dispute | Maximum Time to Receive Final Resolution |
Visa | 9 days | 55 days |
Mastercard | 40 days | 70 days |
American Express | 14 days | 90 days |
Diners | 40 days | 45 days |
Discover | 20 days | 120 days |
UnionPay | 25 days | 45 days |
JCB | 40 days | 45 days |
Affirm (BNPL) | 15 days | 15 days |
Afterpay (BNPL) | 14 days | 30 days |
Klarna (BNPL) | 12 days | 100 days |
PayPal (via PayPal dashboard) | 10 days | 17 days |
PayPal (chargeback via bank) | 10 days | 100 days |
Important
Talo is not liable for chargebacks.
Chargeback outcomes are determined solely by issuer banks and payment networks.
Decisions are final and cannot be changed.
If a chargeback creates a negative balance, Talo may debit your bank account to recover the funds.
The Payment ID shown in your Transactions Table is internal to Talo Payments and cannot be used for external processors (Affirm, Afterpay, Klarna, etc.).
Tracking Your Chargeback Status
View the status of any chargeback in your Talo Transactions dashboard. Possible statuses include:
Action Needed: You can accept or dispute the chargeback.
Expires in “X” Days: Time remains to submit evidence.
Expired: Deadline passed; dispute no longer possible.
Final: Chargeback cannot be disputed.
Accepted: You accepted the chargeback.
Disputed: Your dispute is under review.
Lost: Evidence was not sufficient; customer keeps the funds.
Won: Issuer recognized the charge as valid; funds and fee return to you.
Chargeback Ratio
Payment providers—including Talo Payments, banks, and card networks—expect occasional chargebacks. However, they also monitor your chargeback ratio to assess your risk level as a merchant.
Formula: Total Chargebacks ÷ Total Transactions
A higher ratio increases your risk profile. We strongly recommend following common merchant best practices to reduce the chances of receiving chargebacks.
Chargeback Ratio Threshold
The industry-standard threshold is under 1% (fewer than 1 chargeback per 100 payments).
Additional notes:
Receiving a chargeback in your first month of using Talo Payments is an early risk indicator.
Maintaining a high ratio after three months is also concerning.
The more chargebacks you receive, the riskier your business is considered—which may lead to payout holds, account closure, or other risk-related actions.
If a chargeback creates a negative balance in your Talo Payments account, Talo may debit your bank account to recover the missing amount.
Preventing Chargebacks
It’s always better to prevent a chargeback than deal with one later. Here are the key best practices:
Make product/service info accurate: Customers are less likely to dispute purchases when they receive exactly what they expected. Use correct descriptions and realistic images.
Add clear policies to your site: Display your shipping, refund, and cancellation policies where customers can easily find them so they understand your processes in advance.
Respond to refund requests quickly: Issuing refunds when appropriate reduces the likelihood of customers filing chargebacks.
Make customer support easy to reach: Many chargebacks start with communication issues. Show your contact details clearly, reply promptly, and keep customers updated about shipping, delivery, or any changes to your store policies.