Chargebacks and returned direct debits: two risks hardly any provider explains honestly
With cards the customer has 120 days and has to give a reason, and the merchant can defend itself with evidence. With SEPA direct debit the customer has eight weeks and does not have to give any reason at all. Deadlines, fees and defence compared.
The short answer
In online retail, card and direct debit are the two payment methods that give the customer a right of reversal, but under completely different rules. The card is more expensive, the procedure is regulated, and the merchant can defend itself. Direct debit is cheap, and the customer can reverse it for eight weeks without giving a reason. Anyone offering both needs to know both risk profiles.
Card: the chargeback procedure
The customer's deadline: 120 days from payment. For travel and event tickets the period only starts on the event date; a festival ticket for August bought in January can be disputed until December.
The process:
- American Express has a preliminary stage (retrieval request); Visa and Mastercard no longer use it.
- Formal chargeback: the card scheme debits the amount, and the money is withheld for the entire duration of the procedure. The merchant's response deadline: seven to 21 days depending on the card scheme.
- Dispute (representment): the merchant submits evidence. Review time at the card-issuing bank: 60 to 75 days.
- Arbitration only where the network rules permit it.
Duration: two to three months until a final decision. The outcome is final; even if the customer claims to have withdrawn the complaint, the merchant has to respond with evidence.
Fees (Stripe as an example): 20 euros per chargeback received, 20 euros per dispute, refunded if the case is won. No fee on SEPA direct debit and Cartes Bancaires.
In practice, the most common reason for lost cases is not the facts, but the missed response deadline of seven to 21 days.
Direct debit: the customer's right
With the SEPA core and business-to-business direct debit, the payer can demand a refund under section 675x (2) BGB “without giving reasons”, within eight weeks of the debit (subsection 4). The bank has to refund or refuse within ten business days (subsection 5). For unauthorised direct debits, that is without a valid mandate, the period is 13 months (section 676b BGB).
For the merchant that means: there is no defence against the return itself. The claim continues to exist under civil law, but the merchant has to collect it itself, by reminder, debt collection or court action.
The comparison
| Card | SEPA direct debit | |
|---|---|---|
| Customer's deadline | 120 days | 8 weeks without a reason, 13 months where no mandate exists |
| Reason required | yes (reason code) | no |
| Defence | yes, with evidence in the procedure | none against the return, only debt collection |
| Fee at the provider | chargeback plus dispute fee | often none, but the bank's return costs |
| Transaction costs (Mollie as an example) | 1.80 % plus 0.25 euros | 0.35 euros flat |
What a merchant does with this
- Enable direct debit only for customers with a history or for small, recurring amounts; steer first-time buyers with a high basket towards card, PayPal or invoice purchase with cover.
- Monitor the response deadline on cards: one calendar entry per chargeback, with evidence (delivery confirmation, communication, IP, login) filed ready to use.
- Evaluate the reversal rate per payment method monthly; card schemes penalise merchants above certain rates with fines or termination.
- Document direct debit mandates properly, otherwise the 13-month period applies instead of the eight weeks.