What is a chargeback?
A chargeback occurs when a consumer requests a refund from their credit card company. The merchant is billed by its merchant bank, which has been billed initially by the card issuer. A chargeback fee, often up to $35, is charged per incident to the merchant, which is not refundable regardless of the outcome of the dispute. The merchant bank will charge the merchant 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. So, the more you do to protect yourself against chargebacks, the better off you’ll be.
A Chargeback of $25 is charged to a merchant when a consumer claims their card has been charged and the merchant has not delivered the product or performed the service. The $25 fee and the original charge to the consumer are debited from your account. A chargeback fee is NOT charged when a merchant processes a refund to credit card for a consumer.
When a credit card transaction is disputed (either at the request of the Cardholder or by a Card Issuer), the dispute is handled through a chargeback. A chargeback will cause the amount of the original sale and a chargeback fee to be deducted from the checking account you provided in the online application.
