4 minutes

Mastercard Chargeback Guide: Fees and Time Frames

Written by
Don Hamilton
Published on
February 8, 2024


You’re not alone if you think Mastercard’s chargeback fees and time limits are confusing. Just finding these fees and time limits is difficult.

The short story is: Read your merchant’s agreement to see what you’re up against.

But there’s so much more to it than that.

I’ll sort through Mastercard’s rather dense Chargeback Guide Merchant Edition for you. In this guide, we’ll find rules, conditions, and other hints about their chargeback fees and time limits.

But make no mistake, this guide does not necessarily help you estimate your total financial responsibility. There are many exceptions to the rules and variables to the conditions.

The chargeback guide gives a range of fees and time limits, which can vary based on reason codes, transaction types, or any number of issues. The merchant’s bank adds its own rules, conditions, and fees to the guidelines.

The good news is that you end up with a merchant agreement that applies specifically to your business. This is where your final answers lie.

Let’s see why.

The Mastercard Chargeback Guide

Available as a PDF, Mastercard’s Chargeback Guide Merchant Edition is 730 pages of rules and regulations. Plus, many exceptions to those rules and regulations. This guide is binding. You must follow it. So must your bank.

The guide provides good information. It sets broad rules and standards. It includes maximum limits on fees and general timeframes for the chargeback process. These are designed to ensure consistency and fairness across the global payment network.

But when looking for something in the guide, be prepared to wade through many opaque paragraphs that are superseded or modified by the acquiring bank—your merchant bank.

The Acquiring Bank’s Role

Within the framework set by Mastercard in the guide, each acquiring bank has its own policies.

Merchant Account Policies

The acquiring bank is responsible for setting up the merchant account. This account is governed by the bank’s policies regarding:

  • The ability to accept credit and debit cards
  • Transaction fees
  • Monthly account fees
  • Other service-related fees


Acquirers ensure compliance with card network rules (like Mastercard) and with legal regulations such as anti-money laundering laws.

Risk Management

The merchant’s risk level is analysed, and a risk profile is created. The risk profile impacts fees and terms of service. High-risk merchants face higher fees, stricter contract terms, or both.

Chargeback Handling

The acquiring bank manages the chargeback process.

They handle:

  • Merchant notification of chargebacks
  • Dispute resolution
  • Debiting accounts for chargebacks.
  • Chargeback fee policies
  • Time limits for dispute resolution
  • Thresholds for chargeback ratios

Transaction Processing

Acquiring banks authorise and settle transactions, then distribute the funds. They also provide the hardware, software, and technical support for processing these transactions.


Acquirers regularly report to the merchant.

Reports include:

  • Transaction activity
  • Fees
  • Chargebacks
  • Other relevant financial data


Merchants must comply with Payment Card Industry Data Security Standards (PCI DSS). The merchant’s bank ensures this compliance.

Fraud prevention is also the purview of the merchant’s bank. They implement and advise on prevention measures and tools, but following through is up to you.

Related: Chargeback Fraud 101: What Businesses Need to Know.

The Acquiring Bank’s Central Role

Since the acquiring bank is at the centre of this entire process, it stands to reason that they control and issue the final rules and conditions that the Chargeback Guide states broadly.

Your bank’s terms and conditions are in your merchant agreement.

Your Merchant Agreement

You cannot process debit or credit cards without a Merchant Agreement.

A merchant agreement is fundamental in establishing your relationship with your acquiring bank.

You must thoroughly understand this agreement, as it affects every aspect of your card processing activities, from costs to compliance.

Before signing, you should carefully review the agreement, preferably with legal counsel, to ensure you understand your rights, obligations, and the costs involved in processing card payments.

Typical components of a merchant agreement include:

  • Payment processing details
  • Types of cards accepted (Mastercard, Visa, etc.)
  • Hardware and software you can use for payment processing
  • Transaction and other fees, including chargeback fees
  • Pricing models like tiered or flat-rate pricing
  • Funding schedules and reserve account use
  • Chargeback procedures, fees, and financial liability
  • PCI DSS compliance and additional security requirements
  • Contract duration and termination policy
  • Merchant operational responsibilities, including refunds
  • Record keeping regulations

Mastercard Chargeback Fees

Mastercard does not typically disclose fees, partly because they are volatile and can change for every merchant.

Based on our experience in the field, you can use the following figures to get a rough estimate of what you may pay for chargeback fees.

Chargeback Processing Fee: This could range from $20 to $100 per chargeback, but it largely depends on the merchant's agreement with their acquiring bank.

Administrative Fee: If applicable, this might range from $10 to $50, depending on the complexity and administrative work involved in handling the chargeback.

Currency Conversion Fee: If there's a need for currency conversion, it is typically a small percentage of the transaction amount, around 1% to 3%.

Arbitration Fee: In cases that escalate to arbitration, fees could be several hundred dollars, ranging from $250 to $500 or more.

Retrieval Request Fee: This is usually a smaller fee, somewhere between $10 to $25 per request.

Fines for Excessive Chargebacks: These can be substantial, potentially running into many thousands of dollars ($75,000 per month in extreme cases) if a merchant consistently exceeds the acceptable chargeback ratio.

Mastercard Timeframes

The following timeframes are subject to change by the acquiring bank, but they generally hold true. They are limited by the Chargeback Guide.

Filing a Chargeback

Typically, cardholders have up to 120 days from the transaction date or from when they discover a problem to initiate a chargeback.

Defending Against a Chargeback

Upon receiving a chargeback, merchants have limited time to respond. This period can range from 7 to 45 days, depending on the acquiring bank's policies and the specific circumstances of the chargeback. This includes submitting the evidence needed to refute the claim. Failure to observe strict time limits results in the loss of the dispute.

Looking Forward

Mastercard’s chargeback fees and timeframes are generally difficult to pin down. Your best bet is to refer to your Merchant Agreement to find this information.

You likely have questions about this article or perhaps other chargeback matters.

Visit for answers and solutions. Our customer service is here to help. No charge.

Once there, you can also sign up for a free demo of our service. ChargebackStop can eliminate up to 99% of chargebacks.


Visit to find out how.

FAQ: Mastercard Chargeback Guide

Can chargeback fees be negotiated in the merchant agreement?

Yes, chargeback fees may be negotiable and can vary based on the merchant's relationship with the acquiring bank, the type of business, and the risk associated with the merchant's transactions.

Are there different timeframes for different types of chargeback reasons?

Yes, the timeframe for filing a chargeback can vary based on the reason for the dispute. For example, fraud-related chargebacks might have a different timeframe than those related to service quality.

What happens if a merchant exceeds the response time for a chargeback?

If a merchant fails to respond within the specified timeframe, they may lose the right to dispute the chargeback, resulting in an automatic chargeback against their account.