A chargeback is the return of a transaction from the cardholder’s bank. This may occur if the cardholder is disputing the transaction or if the authorization process was not followed properly. Some common reasons for chargebacks include:
- The authorized owner of the account number used claims that he/she did not engage in or authorize the transaction.
- The cardholder claims that the merchandise or services for which they are being charged have not been received.
- The cardholder claims that the merchandise or services received were not as initially described or were received in defective condition.
- The cardholder claims that the transaction was cancelled and/or the merchandise was returned.
- A valid authorization number was not obtained for the transaction in question.
If the chargeback enters arbitration period and the merchant loses, the merchant is charged $25.
Posted in: General Merchant Account Questions