Chargebacks are an expected part of processing online payments. SmartRec keeps you organized by centralizing all chargebacks in one place, giving you visibility into each chargeback and, for eligible cases, allowing you to respond and defend directly within the Dispute Management portal.
In this article, you’ll learn:
What disputes and chargebacks are
Why they happen
How the chargeback process works
What evidence may be required
How to review and defend chargebacks in SmartRec
How chargeback reversals work
Where to find the financial impact
What are chargebacks?
A chargeback happens when a customer contacts their bank to dispute a charge on their card. If the bank decides the dispute is valid, they reverse the transaction and refund the customer. This system was created to protect consumers from fraud or billing errors.
A dispute may be filed when:
A customer believes they were charged twice
A product or service was not received
The service differed from what was described
The customer doesn't recognize the charge
If a chargeback occurs, the disputed funds are temporarily withdrawn from your organization’s account while the bank reviews the case. You may have the option to defend the transaction, depending on the dispute reason.
What is a dispute?
A dispute is the customer’s request to their bank to investigate a transaction.
A chargeback is the bank’s decision to reverse the funds after reviewing that dispute.
In short:
A dispute is the request
A chargeback is the action
👉 All chargebacks begin as disputes.
Why do chargebacks happen?
While every card scheme (Visa, Mastercard ect) uses detailed “reason codes,” most disputes fall into four main categories:
1. Fraud
The cardholder claims they didn’t authorize the payment.
2. Consumer dispute
The customer says the service wasn’t received, wasn’t as described, or they believed the payment failed.
3. Processing error
Incorrect details such as wrong amount, duplicate payment, or other technical mistakes.
4. Authorization issues
The payment did not receive proper authorization.
How chargebacks work
Although each card scheme (Visa, Mastercard ect) follows its own steps, the typical process looks like this:
The customer disputes the transaction.
The bank issues a chargeback.
The disputed amount is withdrawn from your account.
You will receive an email explaining the dispute and what to do next.
You can Accept or Defend the chargeback (if eligible).
If you defend the dispute, the bank reviews the submitted evidence and temporarily returns the funds through a chargeback reversal.
A final decision is made: won or lost.
If won, you keep the funds that were returned through the chargeback reversal.
If lost after defending, a second chargeback is applied.
💙 All these events are reflected in your SmartRec financial records.
⭐ Managing disputes in SmartRec
SmartRec gives you a dedicated Dispute Management section where you can:
View every active dispute
Review details and deadlines
Upload evidence for eligible cases
Track each case from start to finish
⚙️ Here’s how it works:
1. You receive an email notification
When a chargeback is initiated, the account owner of your organization, as well as any admins with the Manage disputes permission, receive an email notification with the details of the case. The content of the e-mail varies depending on whether the chargeback is eligible to be defended. Expand the sections below to view more information and sample email notifications:
✅When a chargeback can be defended in Dispute management
✅When a chargeback can be defended in Dispute management
When a chargeback can be defended, the e-mail will include:
The disputed amount
The participant’s name
The reason for the dispute
The deadline to respond
Links to the related account and transaction in SmartRec
A Respond to dispute button
This email provides everything you need to begin your review!
🚫When a chargeback can't be defended
🚫When a chargeback can't be defended
When a chargeback can't be defended, the e-mail will include:
The disputed amount
The client’s name
The reason for the dispute
Direct link to the dispute in Dispute management
For chargebacks that cannot be defended, the email notification does not include a Respond or Defend button. It is sent for informational purposes only and contains the details of the case.
📩 Defendable but not in dispute section
📩 Defendable but not in dispute section
In some cases, a chargeback can be defended, but not directly from Dispute Management. In these situations, the email notification includes the details of the case and indicates that you must contact Support to proceed with the defense.
When you open the dispute in SmartRec, only the Accept option appears, along with a message explaining that the case may be defended through Support. Our team will guide you through the next steps and submit the defense on your behalf.
2. View your chargebacks in SmartRec
When a chargeback is initiated, SmartRec displays it in Dispute Management . From there, you can review the details and decide how to proceed.
Go to Accounting & Finance → Dispute Management. You automatically land on the Chargebacks tab, where you can view all active chargebacks, including the respond-by deadline, date opened, payment method, reason, currency, and disputed amount. Selecting the dispute will open a detailed view.
You can filter the list by Last 30 days, Payment method, or Reason.
Admins must have the Manage Disputes permission to access this section. Account owners always have access.
If your organization uses Network, each child organization manages its disputes.
3. Reviewing active chargebacks
Selecting a chargeback opens a detailed view where you can:
View the chargeback amount
See the reason and reason code
Review customer details
Check the respond-by deadline
Open the original transaction
👉 At the bottom of the chargeback, you’ll see the actions available for that case.
Available actions
When you open a chargeback in SmartRec, the actions available depend on the dispute type and the card network’s rules.
You will always see the option to Accept the chargeback.
If the chargeback can be defended directly in SmartRec, you will also see a Defend chargeback button.
✅Accept
✅Accept
Selecting Accept confirms the chargeback. No further action is taken, and the dispute is closed.
You can choose Accept at any time, even if the dispute is eligible for defense.
If Accept is the only action shown, one of the following applies:
The dispute cannot be defended at all, or
The dispute can be defended only through our Support team, not directly in SmartRec
When this happens, SmartRec displays a message indicating whether you need to contact Support to proceed with a defense. If the message instructs you to do so, our Support team will guide you through the next steps and help submit the defense on your behalf.
📝 Defend chargeback in SmartRec
📝 Defend chargeback in SmartRec
If you see the option to Defend chargeback, the dispute can be defended directly from the Dispute Management portal.
When this option is available, you can:
Review the dispute reason and deadline
Upload supporting documents
Submit your response directly in SmartRec
Once submitted, the bank reviews the evidence and temporarily returns the funds through a chargeback reversal.
4. Provide evidence
If you decide to defend a dispute, the next step is uploading documentation to support your case. Once your documentation is uploaded, you can submit your defense directly in SmartRec.
The strongest evidence depends on the dispute type. Here are typical examples:
Dispute reason | Helpful evidence |
Fraud | Attendance logs, proof of AVS match, waivers, email communications |
Service not received | Check-in history, booking confirmations, rosters |
Not as described | Program descriptions, terms and conditions, photos, policies, emails |
Duplicate/incorrect billing | Invoice, receipt, refund proof (if applicable) |
Cancelled subscription | Cancellation timestamp, terms and conditions, policy details |
💙 Which disputes can be defended in SmartRec?
Only certain dispute types allow merchants to submit a defense in SmartRec. At this time, defense is supported for Visa and Mastercard disputes only.
The table below lists the dispute reason codes currently supported for defense in Dispute Management :
Card network | Reason code | Description |
Visa | 10.4 | Other Fraud – Card Not Present |
| 13.1 | Merchandise / Services Not Received |
| 13.2 | Cancelled Recurring |
Mastercard | 4837 | No Cardholder Authorization |
| 4853 | Defective / Not as Described |
👉 Some disputes are defendable, but not directly from the Dispute Management section and must be handled through Support, which is clearly indicated by an on-screen message.
5. What happens after you submit a defense?
If you choose to defend the dispute, the bank reviews the submitted evidence and in some cases temporarily returns the funds through a chargeback reversal. You will receive a confirmation e-mail once your evidence has been submitted.
Note: The timing of a chargeback reversal depends on the card network. For Visa and Discover, funds may be temporarily returned when a defense is submitted. For Mastercard and American Express, a chargeback reversal occurs only if the dispute is ultimately won.
💚 If you win your defense
💚 If you win your defense
If your defense is successful, you either keep the funds that were returned when you submitted your defense (Visa and Discover), or receive the chargeback reversal at this stage (Mastercard and American Express). This transaction appears in:
Client Billing
Journal Entries
Financial reports
🔴 If you lose your defense (final decision)
🔴 If you lose your defense (final decision)
If the bank rules against your defense, you will receive an e-mail and a second chargeback is applied. This finalizes the case, and the funds are withdrawn again.
Second chargebacks also appear in:
Client Billing
Journal Entries
Relevant financial reports
6. Where to see the financial impact
Every stage of a dispute is automatically recorded in SmartRec so you can clearly track its financial impact.
6.1 Client Billing
6.1.1 Initial chargeback
When a customer files a chargeback, an initial chargeback entry appears in Client Billing. The disputed amount is withdrawn from your account and reflected immediately in your balance.
The chargeback will also be reflected in the Current balance in client billing.
6.1.2 Chargeback reversal (when you defend)
When a chargeback reversal happens, it will appear in Client Billing. This temporarily returns the disputed funds to your account while the bank reviews the case.
6.1.3 Second chargeback (if the dispute is lost)
If the final decision is not in your favour, a second chargeback appears in Client Billing. This removes the funds again and finalizes the dispute.
6.2 Journal Entries
When a dispute is created, a journal entry is recorded for the initial chargeback. This entry reflects the withdrawal of funds and ensures your accounting records stay accurate.
6.2.1 Chargeback reversal (when you defend)
When a chargeback reversal happens, a journal entry is created for the chargeback reversal. This entry records the temporary return of funds while the dispute is under review.
6.2.2 Second chargeback (if the dispute is lost)
If the dispute is ultimately lost, a second chargeback journal entry is recorded. This final entry reflects the permanent withdrawal of funds and closes the dispute from an accounting perspective.
6.3 Reports
Disputes appear in reports under Standard > Reports:
Payment Summary
Breakdown of Payments
Payouts
This ensures your payout and accounting records match your Amilia Payments activity.
7. Need more details?
Adyen provides a complete guide to dispute reason codes.
This resource shows:
All dispute categories (fraud, consumer disputes, authorization errors, processing issues, etc.)
The underlying reason codes used by each card network
What evidence the bank may accept
Special rules for alternative payment methods
Deadlines and process differences by card type
It’s organized by both dispute category and payment method, so you can quickly find the information you require for a specific case.
Use this resource if:
The reason code is less common
You want to know exactly what documentation the bank expects
You need to understand how disputes work for a specific payment method (Visa, Mastercard, Amex, etc.)
👉 Link here 👈
❓ FAQ
6. What happens if I miss the respond-by deadline?
7. What kind of evidence should I submit when defending a dispute?
8. Where can I see the financial impact of a dispute?
9.Who can access the Dispute Management portal?
10.Where can I learn more about dispute reason codes?
1. What is the difference between a dispute and a chargeback?
A dispute is the customer’s request for their bank to review a transaction.
A chargeback is the actual reversal of funds that happens if the bank agrees with the customer.
2. Why was money withdrawn from my account before I took any action?
When a chargeback is created, the disputed amount is removed from your account immediately.
If you defend the chargeback and win, the funds are returned through a chargeback reversal.
3. Can I defend every chargeback?
No. Each card network decides whether a dispute can be defended.
Only certain dispute types allow merchant evidence. If a dispute cannot be defended, SmartRec will only show the option to Accept the chargeback with no message referring you to our support team.
4. Is there a fee associated to a chargeback?
Yes, please refer to your contract or contact your Amilia representative if you need assistance.
5. How will I know if I need to respond to a dispute?
The account owner of your organization, as well as any admins with the Manage disputes permission, receive an email notification for every new dispute, including the respond-by deadline and a direct link to the case in SmartRec.
6. What happens if I miss the respond-by deadline?
The dispute automatically closes and the chargeback becomes final.
The funds will not be returned.
7. What kind of evidence should I submit when defending a dispute?
Upload documents that clearly show what happened such as attendance records, receipts, communication with the customer, or your refund/cancellation policies.
SmartRec will guide you through what to provide.
8. Where can I see the financial impact of a dispute?
You’ll find chargebacks, reversals, and second chargebacks in:
Client Billing
Journal Entries
Financial reports
Each event is recorded automatically.
9. Who can access the Dispute Management portal?
Only the account owner and admins with the Manage Disputes permission.
10. Where can I learn more about dispute reason codes?
Adyen provides a full list of reason codes and documentation requirements.
Use this resource for uncommon or complex dispute.
👉 Link here 👈
11. What is the difference between a refund and a chargeback?
Refunds and chargebacks both result in money being returned to the customer, but they are very different:
Refunds
Initiated directly with your organization
Follow your organization’s refund policies
Fast and simple
No chargeback fees
Chargebacks
Initiated through the customer’s bank
Take longer to resolve
Involve a formal review process
Can include fees for the merchant
If a customer disagrees with a refund decision, they may approach their bank instead, which can lead to a chargeback.