Chargebacks and disputes
A chargeback can require the business to repurchase or replace an invoice after a customer dispute, non-payment, or eligibility issue.
Key takeaways
- A chargeback returns invoice risk to the seller after defined trigger events.
- Disputes, offsets, fraud, ineligibility, and non-payment are common chargeback triggers.
- Chargeback rights often interact with reserve and default provisions.
- Ask for a written list of every event that can trigger a chargeback under the agreement.
A chargeback moves invoice risk back to the seller after a trigger event. Disputes, offsets, non-payment, fraud, or ineligibility can all be triggers depending on the agreement.
Chargeback language should be read with reserve, replacement invoice, and default provisions.
Possible triggers
| Trigger | Practical effect |
| Customer dispute | Invoice may be repurchased or reserved |
| Short pay | Difference may be deducted from reserve |
| Credit limit breach | Invoice may become ineligible |
Related reading
Sources
- International Factoring Association - International Factoring Association. Accessed 2026-05-19.
- Secured Finance Network - Secured Finance Network. Accessed 2026-05-19.
- Uniform Commercial Code Article 9 - Uniform Law Commission. Accessed 2026-05-19.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.