What is a chargeback?
A. A chargeback occurs when a customer disputes a charge on their statement by contacting the credit card company instead of contacting you. If a customer does not recognize the charge on their statement, or if they believe the amount was wrong, they may call their credit card company and ask them to investigate. Thus begins the chargeback. The merchant bank will charge you a fee for the retrieval of information, and if it is determined that the customer is right, there will be another fee for the chargeback itself. The customer will be refunded their money directly through the credit card company and your checking account will be debited. Eventually, if your account has excessive chargebacks, the bank may choose to cancel your account. The more you do to protect yourself against chargebacks, the better off you’ll be.
This occurs mostly when someone has fraudulently used a credit card. In this case, the amount is charged back to your account and a fee of US$30 is charged. It’s an expensive business, and therefore important to watch out for fraud. We’ll provide you with a quick guide on preventing this from happening to you.
A credit card charge dispute procedure initiated by the credit cardholder or issuer bank. Merchants can reduce the number of chargebacks by making sure their customers are clearly informed about how the charge will appear on their monthly credit card statement. Merchants should try to avoid chargebacks as much as possible for two reasons: 1) to maintain good standing with the merchant account provider and 2) because each instance of a chargeback incurs a non-refundable fee (anywhere from $10-$30 each).
A chargeback occurs when a cardholder disputes a transaction that you have processed. The most common reasons for chargeback are the card being used without the true cardholder’s permission, or the same transaction being processed more than once. The Chargeback Processing Fee may be reversed if sufficient proof can be provided by the merchant as to the validity of the transaction. Please note that you need to be aware that getting an authorisation only confirms that the card number is valid and in some cases that there are sufficient funds available in the cardholder’s account. It does not confirm that the person seeking to perform the transaction is the legitimate cardholder. A transaction can still be charged back even if you obtained an authorisation.
