Understanding how payment disputes work is essential to maintain the health and stability of your business.

This guide explains what chargebacks are, how they are handled within Cartpanda, and how you can collaborate during the dispute process.

What is a Payment Dispute?

A payment dispute, also known as a chargeback, occurs when a cardholder contacts their issuing bank to question or reverse a transaction made with their credit card.

This may happen for different reasons, such as:

• The customer does not recognize the purchase
• The customer believes the product was not delivered
• The customer claims the product is not as described
• The customer wants to cancel the transaction through their bank

When a dispute is opened, the issuing bank temporarily reverses the payment while the case is reviewed.

Cartpanda as Merchant of Record

Cartpanda operates as the Merchant of Record (MoR) for purchases made through the platform.

This means that Cartpanda is the legal seller of the transaction, and therefore:

• Cartpanda is the entity that receives and manages the chargeback with the payment networks
• Cartpanda is responsible for submitting the official defense to the issuing bank
• Merchants collaborate by providing relevant information and documentation

The chargeback process is therefore handled by Cartpanda, but merchant cooperation is essential to increase the chances of a successful defense.

How Credit Card Chargebacks Work

1. Dispute Initiation

The customer contacts their issuing bank to dispute the transaction.

The issuing bank notifies the card network (Visa, Mastercard, etc.), which then communicates the dispute through the acquiring and payment infrastructure.

Cartpanda receives this notification and records the dispute in the order timeline.

2. Temporary Amount Hold

When a chargeback is opened, the transaction amount is temporarily held.

This happens because the acquiring bank temporarily reverses the funds from Cartpanda while the case is under investigation.

3. Evidence Collection

To contest the dispute, Cartpanda may request supporting documentation related to the order, such as:

• Shipping confirmation
• Tracking information
• Delivery confirmation
• Product description
• Customer communication records

These materials help support the legitimacy of the transaction.

4. Defense Submission

Cartpanda compiles the evidence and submits the defense to the payment network and issuing bank.

Merchants typically have up to 7 calendar days to provide the requested information once the documentation request is sent.

5. Bank Analysis

The issuing bank analyzes the case and decides whether the transaction should remain valid or be permanently reversed.

This process may take up to 120 days, depending on the bank and card network.

6. Final Outcome

Dispute Won

The bank accepts the defense and the transaction amount is returned.

Dispute Lost

The bank confirms the dispute and the amount remains reversed.

How to View Chargebacks on Cartpanda

If an order has an active chargeback, you can locate it in the platform: Orders → All Orders → Filter: Chargeback

You can also review the order timeline, where dispute events and status updates are recorded.

Chargebacks vs Refunds

It is important to understand the difference between refunds and chargebacks.

Refund

A refund happens within the platform, usually through customer support.

Examples:

• Customer cancels the order
• Customer returns the product
• Customer receives a goodwill refund

Chargeback

A chargeback occurs when the customer contacts their bank instead of support to reverse the transaction.

This means the process is handled outside the platform through the banking system.

Transparency in Dispute Reporting

Some international platforms convert disputes into refunds before they become official chargebacks.

Cartpanda follows a transparent reporting model, meaning:

• Refunds remain categorized as refunds
• Bank disputes are categorized as chargebacks

This allows merchants to clearly understand their performance and risk metrics.

For a complete picture of customer returns, merchants should analyze: Refund Rate + Chargeback Rate

Updated on: 03/16/2026