How do you stop holiday returns becoming chargebacks?

Holiday returns become chargebacks when the refund is slow or blocked, and Adobe counted 1 in 7 holiday returns in the last week of December. Refund each return the day it arrives, before a dispute opens, because Stripe and Shopify will not let you refund outside the process once a dispute is open.

Why does the last week of December matter?

That is when many returns land. In Adobe's count of the 2025 holiday season, 1 in 7 returns happened between December 26 and 31, and returns that week rose 4.7% on the year before. Support queues are thinnest then and customers most impatient, so plan refund cover for those days.

The scale is large. The National Retail Federation and Happy Returns projected US returns of $849.9B for 2025, with 19.3% of online sales sent back and 9% of returns fraudulent.

That fraud figure tempts some merchants to answer a flood of returns with delay. An honest customer kept waiting will dispute just as readily as one who is not, and the merchant ends up with a chargeback in place of a decision. Decide each return promptly.

How does a slow refund turn into a chargeback?

A customer who sent a parcel back and sees no money can tap a button in the banking app. The bank files a credit-not-processed dispute, Visa's reason code 13.6 for a refund the cardholder says never came. Under Visa's rules the issuer waits only 15 days from the date on the credit receipt, then has up to 120 days after that date to act.

The margin on the order, the $15 US dispute fee that Stripe and Shopify charge, and the goods back on the shelf are then all lost together. A faster refund would have cost the price of the item and nothing more. Check how many returns are sitting unrefunded today.

When should the customer expect the money?

About two weeks after you accept the return, under the legal clock. Regulation Z gives a merchant 7 business days to send a credit statement to the card issuer, and the issuer then credits the cardholder within 3 business days of receiving it.

Tell the customer the date the credit statement was sent, and say to expect the posting a few days later. That answers the question the customer would otherwise take to the bank.

Why can't you refund once a dispute opens?

Stripe says it will not let a merchant refund outside the dispute process once a dispute is open, and Shopify says the same of an open chargeback. If a customer files on Monday and you push a refund on Tuesday, the refund may not go through. You are then left with a case to answer on an order you already meant to refund, so refund before the dispute exists.

Early fraud warnings follow the same logic. Stripe reports that about 40% of Visa and Mastercard early fraud warnings become fraud disputes if the charge is not refunded, and that a refund only stops the fraud report when processed as a reversal, usually within about 2 hours of capture. If you would refund a suspicious $20 order anyway, do it at once as a reversal.

When a dispute arrives despite all this, our guide on whether to refund or fight a chargeback covers the decision.

Takeaway: what to do this week

1. Name an owner and a backup for refunds. Cover every day from December 24 to January 2.
2. Refund each return the day it is scanned in. Do it before the stock count, so the credit goes out before a dispute is likely.
3. Put the credit date in the confirmation email. State the date the credit will reach the card.
4. Refund suspicious small orders as reversals. A reversal, usually within about 2 hours of capture, is the refund that stops the fraud report.

Sources: Adobe, 2025 holiday shopping season press release (7 January 2026); NRF and Happy Returns, "2025 Retail Returns Landscape" (15 October 2025); CFPB, Regulation Z, 12 CFR 1026.12(e); Visa, Visa Core Rules (edition 18 April 2026), Table 11-125; Stripe Docs, "How disputes work"; Stripe Support, "June 2025 pricing updates for disputes"; Shopify Help Center, "Resolving a chargeback" and "Responding to chargebacks". All checked 24 October 2026.