BNPL marketing tells the merchant the provider absorbs chargebacks. For consumer-dispute reason codes, the chargeback comes through the card network behind the BNPL and lands the same as any other.
A merchant who added Klarna at checkout in early 2024 watched their headline chargeback ratio drop 30% in the following quarter. By the second quarter of 2026, BNPL had become the single largest source of disputes on their books. The drop was real. So was the rebound. The merchant had read the BNPL sales pitch — that the provider absorbs chargebacks — and missed the part of the contract that defines what "chargeback" actually means in that sentence.
BNPL providers absorb fraud-coded chargebacks against their own credit decision. If someone applied for the Klarna or Afterpay loan fraudulently and the merchant fulfilled the order in good faith, the provider eats the loss. That is what the marketing means. The marketing does not mean that the merchant is insulated from consumer disputes. A cardholder who pays through Klarna and later claims the goods did not arrive, did not match the description, or were cancelled but charged anyway, files a chargeback through the card network behind the BNPL. The transaction is usually a Visa or Mastercard charge tokenized to the BNPL's funding source, and the chargeback lands on the merchant's books the same as any 13.1, 13.3, or 13.7.
The split is not malicious on the BNPL's part. It reflects the underlying mechanics of card-network rules, which the BNPL cannot rewrite. But the merchant rarely reads the contract closely enough to find where the absorption ends and the pass-through begins. The discovery usually happens 12 to 18 months in, when BNPL volume has scaled and the previously-buried consumer-dispute share surfaces as a portfolio problem.
The letter framing on a BNPL-originated dispute also requires a small adjustment. The BNPL is named in the chargeback record, and a rebuttal that ignores the BNPL involvement reads to the issuer's analyst as a merchant who has not understood the transaction. The defensible letter acknowledges the BNPL was the payment method, confirms the merchant's own fulfilment under the underlying order, and addresses the consumer-dispute reason code on its merits. The same evidence categories matter as on a direct card transaction: delivery proof, AVS state at authorization, the customer communication trail. The framing language differs in two or three sentences, and a generic 13.1 letter on a Klarna case loses recovery the merchant would have collected had they written the BNPL paragraph.
The merchants who run a positive return on their BNPL volume treat it as direct card volume for dispute purposes. Upstream capture, response timing, and evidence flow are unchanged. The letter framing is the only piece that differs, and it differs in ways that compound across a portfolio as BNPL providers shift their reporting flows and as the issuing banks behind them refine review patterns. The proprietary rule library representments.com maintains carries the BNPL layer alongside the network and issuer layers, so a Klarna-flagged 13.3 gets a letter that argues the merchant's fulfilment and addresses the BNPL involvement in the same draft, refreshed against observed outcomes as the BNPL space matures.