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Guide to chargebacks

What is the chargeback process?

If a cardholder sees a transaction on their credit card that they have not made, or if they were charged an incorrect amount, they can dispute that transaction with their bank or financial institution. If the cardholder’s bank feels the dispute is valid, the transaction in dispute is reversed from your merchant account and refunded to the cardholder. This process, and ultimately the reversal of the payment is called a chargeback.

How does the chargeback process work?

Step 2. Their bank will issue a chargeback.

The cardholders’s bank will lodge a dispute through the card scheme, typically Mastercard, Visa or eftpos and this will raise a chargeback with Westpac.

Step 3. We’ll contact you and ask for some information.

We will send you a notification via letter and/or email*, to let you know that one of your transactions has been disputed. In the notification we’ll request some documentation like the:

  • terms and conditions of the initial sale
  • order form, invoice or other sales record
  • signed delivery receipt or other confirmation of delivery
  • correspondence (if any) from the cardholder.

We may also request additional supporting documentation. Please reply promptly within the timeframes specified in your chargeback notification.

Step 4. The dispute will be assessed.

Once we have all the documentation we’ll assess whether we have enough evidence to challenge the chargeback.  We will lodge all relevant information provided by the merchant with the card schemes (Visa, Mastercard or eftpos). The final decision will be made by the card schemes. 


If you disagree with the assessment or outcome of the chargeback, contact our Merchant Chargebacks team on 1800 029 749 (8am to 4:30pm AEST) or by email at You will need to provide further evidence to support your dispute, like the information we ask for in step 3.

Step 5. An outcome will be reached.

There are two possible outcomes from the assessment:

  1. The chargeback is ruled in favour of the customer – if the request is determined as being valid, the transaction amount will be debited from your settlement account and a chargeback fee may be applied to your merchant account.
  2. The chargeback ruled in your favour – If the card schemes determine the chargeback is not valid, there will be no debit passed onto you and no chargeback fee will be applied to your merchant account.

What about chargebacks related to fraud?

A cardholder’s bank can make a fraud chargeback on a transaction if, for example the:

  • transaction is illegal or prohibited
  • customer did not authorise the transaction
  • customer says they are not liable for the transaction
  • authorisation for the transaction is declined.

The process for fraud related chargebacks is slightly different to the typical chargeback process. 


Step 1. A fraud chargeback is automatically debited from your account. 

Step 2. You will receive a notification (via letter and/or email*) that your account has been debited. 

Step 3. You’ll have a chance to dispute the fraudulent chargeback by following the process outlined in the notification.

Why do chargebacks occur?

Here are some of the common reasons for chargebacks.

  • A customer doesn’t recognise the transaction
  • A transaction was fraudulent
  • A transaction was processed more than once
  • The incorrect amount was charged
  • The goods or services have not been received 
  • A credit or refund was not processed 
  • A sales receipt was changed without the customer’s authorisation
  • Transaction amount was above your floor limit, but no authorisation was obtained.

How can I prevent chargebacks from occurring?

There are a few things you can do to help reduce the risk of chargeback requests:


  • Follow the rules. Always follow the terms of your merchant agreement for processing transactions and retain proof for all transactions.
  • Keep detailed records. Keep detailed records showing that your customer has received the goods and services they paid for.
  • Get a delivery receipt. Always deliver goods or services as advertised and get a confirmation that goods were received by the actual cardholder.
  • Reduce refund fraud. Only refund to the same card that was used to make the purchase. Do not refund with cash or cheque if a purchase was made on a card. 
  • Use a familiar name. Use a business or company name that is recognised by your customers – and matches the name on your transaction receipts.
  • Promptly resolve disputes. Be proactive and communicate clearly with your customers when there is an issue.

Chargeback FAQs

A credit card is issued by a cardholder’s bank or credit union, but the credit card schemes like Visa, Mastercard and eftpos set the rules around chargebacks. The card schemes issue chargeback rules for merchants, cardholders, and banks to ensure that chargeback processes are applied consistently. The schemes outline the chargebacks that are automatic and the ones you can dispute.

Some chargebacks can be challenged. It’s important to familiarise yourself with the chargeback guidelines set out by the schemes. If you are unable to provide satisfactory evidence to challenge the chargeback, the dispute may become an automatic chargeback and your merchant bank account may be automatically debited.


If you would like to challenge a chargeback, please contact our Merchant Chargebacks team on 1800 029 749 (8am to 4:30pm AEST) or by email at

We understand it can be frustrating to be debited before a case is decided, we need to ensure that funds are available for the cardholder if the chargeback is decided in their favour. Should the case be resolved in your favour, the funds will be returned to your settlement account as per the original transaction.

You should be careful when processing manually keyed transactions for online and mail or telephone orders (also known as MOTO) as these carry a higher chargeback risk. Be fraud aware. A common technique used by fraudsters is to present a stolen card or stolen card numbers and claim the original card is 'damaged’. Learn more about how to avoid and respond to fraud and scams.

We will send you a letter and/or email* to notify you of a chargeback. We need to be able to contact you during the process, so please make sure all your contact details, including your email address, are up to date.

The card schemes like Visa and Mastercard recommend that you keep your receipts for up to 540 days (about 18 months) from the date of purchase.

Things you should know

*We will email you where we hold a valid email address for you. A condition of your merchant facility is to provide Westpac with a valid email address.