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Merchant Chargeback Rights: What Aesthetics Business Owners Must Know

By Kaleb Winn, Payments Success Manager at Boulevard . Jul.29.2025

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Arm yourself with knowledge against fraudulent chargebacks and payment disputes

The Consumer Credit Card Protection Act and the Fair Credit Billing Act were a one-two punch for consumer rights, giving people the right to submit a chargeback in the event of unauthorized purchases. However, the ease of submitting a payment dispute has led to a rise in “friendly fraud” — a type of chargeback where a client attempts to get a refund through the chargeback process. 

While consumers have rights that protect them from credit card fraud, your aesthetics business also has rights that protect it from fraudulent chargebacks. Here are five key merchant chargeback rights you should be aware of.

5 merchant chargeback rights you should know

1. The right to defend yourself

When a client submits a chargeback request, the credit card issuer automatically takes the payment amount from your business’s account and places it in the client’s account. 

This isn’t a default ruling in the cardholder’s favor, though. It’s actually a temporary hold that marks the beginning of the chargeback process, signaling that you now have an opportunity to defend yourself.

This step is called representment, and it’s one of the most crucial credit card chargeback merchant rights you have. It means you have a chance to either accept the chargeback or dispute it. 

If you decide to dispute the chargeback, you can then present evidence to make your case. Signed documentation, copies of your various cancellation, membership, and return policies, alongside any other details, can all be used to back you up in the event of a chargeback. Send along an accompanying rebuttal letter to provide additional context that will strengthen your dispute. 

Don’t just roll over and accept the loss if you know your business is in the right. Make sure your policies are clear and displayed prominently, and keep receipts to back you up if and when the time comes to defend yourself.

2. The right to know why a chargeback occurred

If you’re on the receiving end of a chargeback, you won’t be left in the dark wondering why it’s happening. 

Clients need to submit a reason to their bank or card issuer when they request a chargeback, and they’ll pass that information along to you so you can respond in kind. You’ll receive this information in the form of a “reason code.” Typically, reason codes are four-digit numbers, but they can also come in the form of a combination of letters, depending on the issuer. 

Reason codes eliminate ambiguity, enabling you to understand precisely why a chargeback is occurring and what steps to take in response. For example, MasterCard uses the 4837 reason code for fraud, which is designated as “No Cardholder Authorization.” This code means your client claims they didn’t authorize the transaction. If you have evidence that proves the client did, in fact, authorize their purchase, you now know what to submit when you dispute this case.

Each bank and card issuer provides guides that are either publicly available or accessible through its merchant platforms. This information will help you understand how to fight chargebacks — use it to guide you through the process.

3. The right to get your products back

Your beauty business likely sells products in addition to the services it provides. Sometimes, these products don’t work as intended. A solid return policy that accounts for defects will allow clients to exchange these products for a replacement, with no fuss.

However, some types of friendly fraud will claim the product is defective without ever attempting to return it. In this case, you have the right to request a return of that product before the card issuer can finalize the chargeback. For example, Visa’s chargeback guidelines state that you can inform them that the client hasn’t returned the defective product as part of the representment process. 

This right also applies to products shipped to the client. For late deliveries, the client must prove that they have attempted to return the product before they can file a chargeback, which is usually enough for the client to contact you to try to work things out. And if your client does return the product for any reason, they typically must wait 15 days before submitting a chargeback to reduce the likelihood of duplicate refunds. 

4. The right to only pay back the purchase price

When a client submits a chargeback, you are only responsible for refunding the original purchase price. That means you won’t need to pay back more than the amount the client paid.

On top of not getting saddled with an extra penalty on top of the amount refunded, you’re also protected in a few other scenarios:

  • If you’ve already refunded some of the client’s money, the chargeback only applies to the remaining purchase amount.

  • If the client received a discount on a product or service, the chargeback applies to the discounted price.

  • If the client received cash back on top of the purchase price at the point of sale, the chargeback only applies to the amount paid for goods and services your establishment provided.

Of course, any chargeback fees the bank or card issuer applies during this process are separate from this process, so you should still try to keep chargebacks to a minimum. Even so, there’s at least some peace of mind knowing you won’t have to refund more than what the client paid during any given chargeback.

5. The right to a statute of limitations

If a client discovers an issue with their credit card or is frustrated with their aesthetic outcomes, they have to report this to their bank or card issuer in a reasonable time frame. Without this limitation, running a business would be nearly impossible, as every transaction could be a potential dispute.

The amount of time clients have to submit a chargeback depends on the reason code. Some are more time sensitive and require clients to submit their chargebacks within a few weeks, while others offer a maximum time limit of 120 days. Once that transaction hits the limit, you’re in the clear.

You won’t always be able to win (or even prevent) every chargeback that comes your way. But if you know your merchant chargeback rights, you’ll know how to defend yourself and give your aesthetics business the best shot of mitigating the fallout as much as possible.

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