Guidance for Chargebacks Caused by COVID-19

There have been a higher than normal number of chargebacks and refunds recently due to many businesses being forced to close temporarily.

Visa has recently issued guidance regarding chargeback cases for 13.1 – Services Not Received cases.  These cases may be considered an invalid dispute if the merchant was required to close by a government order.  Other card brands have said such disputes will be reviewed on a case-by-case basis.

For all chargeback cases, you essentially have two options:

  1. "Accept” the dispute and allow the cardholder to be refunded.
  2. “Represent” the dispute with supporting documentation.

If you choose to represent a case, you will need to do so before the reply-by date, and we recommend the following documentation be provided:

  • Evidence of government order of shutdown (ie. State executive orders, city or county orders.)
  • In some cases, we have found the state executive order and attached it to the documentation on your behalf. You should be able to see this in the case details in the merchant portal.
  • Include evidence that the merchant offered the cardholder a reasonable alternative credit in line with their terms and conditions.

As usual, our payments team will add notes with recommendations based on the reason code in the case details for each case.  Please review these notes and add any recommended or relevant documentation for the case before the reply-by date.

To prevent additional disputes, communication with customers is critical.  There are some things you can do which may help:

  • Send reminder emails prior to billing cardholders.
  • Send email receipts when billing cardholders.
  • Respond quickly to customer questions or refund requests.
  • Be sure to maintain a written record of all communications with customers regarding charges, refunds, or account credits.

Additional Resources:



  • If the merchant has cancelled services, they may offer the cardholder a reasonable alternative for future service.
    • Cardholder is not obligated to accept unless the merchant’s terms and conditions include such a clause and was properly disclosed at the time of the original transaction.
    • Situations in which a merchant refuses to issue credit citing legislation or government regulation will be reviewed on a case-by-case basis.
  • Mastercard Best Practices Guide


  • The Discover Disputes process will continue as normal until further notice. Merchants are encouraged to be flexible and to act in good faith to resolve disputes. Below is a list of Best Practices from Discover:
    • Merchants are encouraged to work together with their customers to provide refunds, alternate accommodations, and/or vouchers for rescheduled events as a result of services not rendered due to coronavirus restrictions.
    • Merchants are encouraged to cease charging ‘no show’ fees for Cardholders in impacted areas, and to work with their customers to find an amicable resolution.
    • As applicable, Merchants are encouraged to communicate with their customers and work together regarding potential delays or extensions of goods or services.

American Express

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