Understanding Chargebacks in DealerWorks

Modified on Thu, Apr 23 at 10:29 AM

This article explains what a chargeback is, how it affects your dealership financially, and where to manage chargebacks in DealerWorks.

What Is a Chargeback?

A chargeback is a payment reversal initiated by a customer's bank. When a customer disputes a charge on their card — claiming fraud, a billing error, or a problem with the service — their bank can file a chargeback on their behalf and pull the funds back from the dealership.

Chargebacks exist to protect cardholders. For your dealership, they represent a formal claim that requires a timely response — typically from the accounting team, working with service, parts, or whoever handled the original transaction.

How Chargebacks Affect Your Account

When a chargeback is filed, the disputed amount is typically debited from your account within a few days — before any review takes place. The funds are held while the bank and card network (Visa, Mastercard, Discover, etc.) evaluate the dispute.

If you submit a defense and the dispute is resolved in your favor, the funds are returned to your account. If the dispute goes undefended or the defense is unsuccessful, the chargeback stands and the funds are not recovered.

Act Quickly

Response windows can be as short as 9 days depending on the card type and region. Missing the deadline means the chargeback stands regardless of whether the original charge was valid. As soon as you receive a chargeback notification, start gathering information immediately.

Where Chargebacks Appear in DealerWorks

When a customer's bank files a chargeback, DealerWorks receives the notification and the dispute appears automatically in your Chargebacks list. You can find it at Accounting → Disputes in the left sidebar.

From there, you can review the full dispute details, upload supporting documents, and submit your response — all within DealerWorks. Your submission is sent through DealerWorks to the card network for review.

Staying on Top of Chargebacks

Check Accounting → Disputes regularly. Depending on your dealership's setup, you may also receive email notifications when a new chargeback arrives — but don't rely on notifications alone. Logging in to review open disputes ensures nothing slips past its deadline.

Defendable vs. Non-Defendable Chargebacks

Not every chargeback can be defended. Each dispute in DealerWorks includes a Defendable field that indicates whether a formal response can be submitted. When Defendable shows No, the dispute cannot be contested through the standard process.

For disputes that are defendable, DealerWorks shows exactly which types of documents are required based on the dispute category. Your job is to gather those documents from the appropriate people at the dealership and upload them before the deadline.

Your Two Options on Any Chargeback

Submit a Defense

Fight the chargeback by providing evidence

Gather supporting documents from the dealership — signed repair orders, photos, customer approvals — and upload them through DealerWorks. If the dispute is resolved in your favor, the funds are returned to your account.

Accept Liability

Concede the dispute without contesting it

The case closes immediately, the chargeback stands, and the funds are not recovered.

This action is permanent. Accepted chargebacks cannot be reopened or reversed.