Chargebacks in Canada: A Small-Business Response Playbook
What Canadian merchants should do when a card transaction is disputed: deadlines, evidence, prevention and when a refund is the better business decision.
A chargeback reverses a card transaction through the card network process. Merchants should identify the reason code, meet the processor deadline and submit concise evidence tied directly to the transaction.
First response
Open the processor notice immediately. Confirm the disputed amount, date, card channel, reason and response deadline. Do not send unrelated records or sensitive card data by ordinary email.
- Match the order or invoice.
- Check whether a refund already occurred.
- Preserve receipts, delivery proof and customer communication.
Build a short evidence packet
Useful evidence depends on the reason. It can include an itemized receipt, signed agreement, delivery confirmation, refund policy shown before purchase, proof of service, device or authentication result and communication demonstrating customer participation.
- Lead with a one-paragraph timeline.
- Label each attachment.
- Answer the reason code instead of telling the whole company story.
When not to fight
If the merchant made an error, cannot document fulfilment or already promised a refund, accepting the dispute may cost less than staff time and escalation. Never create or alter evidence.
Prevent the next dispute
Use a recognizable billing descriptor, clear return terms, accurate delivery promises and prompt support. For card-not-present sales, use the security tools supported by the gateway and processor. Qualified authentication can affect fraud-liability outcomes, but no control eliminates every dispute.
Put the comparison into practice
Compare Canadian payment processors, then calculate your effective processing rate using one complete statement period.
Frequently asked questions
How long do I have to answer a chargeback?+
The deadline appears in the processor’s notice and can be short. Use that exact date; network and processor timelines vary.
Does a chip or tap transaction prevent chargebacks?+
No. It can affect certain fraud scenarios, but disputes can still arise for service, authorization, duplicate processing and other reasons.
Check current rates and terms with the provider. KYMPAY also sells merchant services; read our editorial approach.