How can I handle a chargeback while a refund is pending?

Topic summary

Main issue: Managing a chargeback (bank-initiated payment dispute) when a Shopify refund is still pending.

Sequence:

  • Order was fulfilled, then the merchant canceled it in Shopify.
  • Shopify shows the order as canceled with a refund pending.
  • While the refund is pending, the customer initiated a chargeback with their bank.
  • Because of the chargeback, the refund action in Shopify cannot be completed.
  • The customer’s dispute proceeds despite the pending refund.

Impact:

  • Merchant is blocked from issuing the refund through Shopify due to the active chargeback.
  • Uncertainty about the proper next steps to resolve the payment and dispute.

Clarification:

  • Chargeback = the cardholder asks their bank to reverse a charge; this typically locks the transaction while the dispute is reviewed.

Status:

  • No resolution or guidance provided yet; the author is requesting advice on how to handle the situation.
Summarized with AI on January 8. AI used: gpt-5.

I have an order, I carry it out. Then I wanted to cancel that order so I canceled the order. Shopify canceled the order. While a refund is pending, the customer submits a chargeback request, the refund function cannot be performed. The customer still opens the charge again. How should I handle it?