Guide · Dispute reasons
Deposit chargebacks: when “non-refundable” holds up
Customers dispute deposits as cancelled services or services never received, and the clock can run up to 540 days after the payment. A non-refundable deposit holds up when the customer agreed to the terms, including when the right to cancel ran out, before they paid.
Key takeaways
- The label doesn’t protect you. “Non-refundable” works only if the customer agreed to it before paying.
- Deposits have a long tail. The dispute clock can start on the service date, up to 540 days after the payment.
- Visa wants the cut-off date in writing. The agreement should say when the right to cancel without losing the deposit ends.
- Ready and willing counts. If the customer walked away and you could still do the work, a “never received” claim is on weak ground.
Why deposits get disputed
Deposits sit at an awkward spot. The customer pays now. The service happens later. In between, plans change: the wedding moves, the patient gets cold feet, the homeowner hires someone cheaper. When you keep the deposit, some customers go to their bank.
Dental and medical practices, med spas, event venues, photographers, contractors and tutors all take deposits, and they all see this. The dispute usually arrives in one of two forms:
| The customer says | Typical Visa code | What decides it |
|---|---|---|
| “I cancelled and want my deposit back.” | 13.7 Cancelled Merchandise/Services | Whether your cancellation terms were properly disclosed and accepted, and whether you followed them |
| “I paid and never got the service.” | 13.1 Merchandise/Services Not Received | Whether you were unwilling or unable to provide it |
On Stripe, a 13.7 dispute shows up as Credit not processed. Don’t let the label fool you. It’s a cancellation dispute about your deposit terms.
The long tail: disputes long after the payment
Most card disputes must be filed within 120 days of the payment. Deposits are different. For services the customer expected later, Visa lets the 120 days run from the date they expected the service, never more than 540 days after the payment. Stripe puts it simply: when a customer pays for a future service, the dispute window generally starts on the service date.
So a deposit paid in January for a June procedure can be disputed into the fall. Keep the agreement, the messages and the schedule for at least 18 months. All the chargeback time limits.
For cancellations, Visa also makes the bank wait 15 calendar days after the customer cancels before filing, unless that would push past the time limit or you refused the cancellation. That gives you a short window to sort it out directly.
What Visa requires before you take a deposit
Visa’s rules treat a deposit as an advance payment. Before taking one, the merchant must get the customer’s express, informed consent to an agreement that includes, among other things:
- A description of the service and the total price
- The cancellation and refund policy, including the date any right to cancel expires without losing the deposit
- Your location and how to contact you about the charge
And the general disclosure rule applies too: in person, the policy is shown before the sale or on the receipt with a space to accept it; online, it comes before final checkout with a click-to-accept box.
The cut-off date is the insight most merchants miss. “Deposits are non-refundable” says nothing about when. “You may cancel for a full refund until March 1; after that the deposit is kept” gives the bank a date to measure against.
When “never received” doesn’t fit
Two details in Visa’s not-received rules matter for deposits:
- Unpaid balance. A not-received dispute is invalid for a partial advance payment when the customer didn’t pay the remaining balance and you’re still willing and able to provide the service.
- Customer cancelled first. It’s also invalid when the customer cancelled before the service date. That’s a cancellation case, judged against your terms.
The flip side is fair. If you cancelled, closed or couldn’t perform, the customer is entitled to the part of the service they didn’t receive.
Card rules aren’t the only rules. State consumer-protection laws and professional boards can add their own limits on keeping prepayments. Check yours before you write “non-refundable” on anything.
What proof matters
Keep it short and dated: the deposit terms the customer accepted and when, the cancellation date from your records, and proof you were ready to provide the service. Financing a deposit through a lender? That’s a different process. How lender disputes work.
Dispute Daddy builds the response from your dispute notice and your own records, and you submit it to your processor yourself. See how Dispute Daddy builds it for you.
