What do I do when a customer threatens to file a chargeback on a paid invoice?
Customer threatening a chargeback — what actually happens, and what to do
Short answer
First, take the threat seriously without panicking. Visa and Mastercard give cardholders up to 120 days from the transaction to file a chargeback, so the window is real but not unlimited. Document everything you have on the engagement (signed contract, scope, deliverables, communications, proof of delivery). Try to resolve the dispute directly first — most threats never become actual chargebacks because direct resolution is faster for both sides. If the chargeback gets filed, you typically have 9 to 30 days to respond with evidence, depending on the processor. Win-rate on well-documented disputes is much higher than most merchants expect.
A chargeback is a dispute filed by a customer with their card issuer that reverses a charge — the funds are pulled from your merchant account back to the customer's card. The card networks (Visa, Mastercard, Amex, Discover) define the dispute reason codes and the timing windows. Visa cardholders typically have 120 days from the transaction or expected delivery date to file; Mastercard mirrors this. Future-delivery transactions can extend the window up to 540 days.
Most chargeback threats never get filed. The customer says it because they're frustrated and they know it's the strongest leverage they have. Try the direct resolution first: ask what specifically went wrong, see if there's a remedy short of a full refund (partial refund, a redo, or a service credit), and document everything in writing. A customer who will accept a $200 partial refund and a re-do is much cheaper to keep happy than the same customer in a contested chargeback.
If the threat becomes a real chargeback, you'll get a notification from your processor (Stripe, Square, or your bank's merchant services). The notification names the reason code and gives you a response deadline. Effective July 2025, Adyen tightened response windows to 9 days for US and Canada, 18 internationally; Stripe and Square run between 7 and 21 days depending on reason code. Miss the deadline and you forfeit the dispute by default.
Winning the dispute comes down to evidence. The strongest documentation is: a signed contract or accepted estimate, written communications confirming the scope, proof of delivery (photos, signed completion forms, tracking numbers, log files for digital services), prior payment history with the customer, and any record of the customer accepting the work before the dispute. Reason codes matter — "product not received" is winnable with delivery proof; "product not as described" is harder and turns on whether scope was clearly documented up front.
The prevention layer is what reduces chargeback frequency long-term. Clear scope in the engagement letter. Written acceptance at delivery. Prompt invoicing while the work is fresh. And — for service businesses where Syntharra is calling about overdue invoices — first-party calls in the creditor's name, never threats of unfiled litigation, never misrepresentations of legal status. A polite, well-documented dunning sequence rarely produces chargebacks; an aggressive third-party collection effort often does.