Discover what a chargeback is, how to avoid them, and your chargeback rights as a merchant.
What is a chargeback?
A chargeback is a transaction that is processed by a credit card issuer during which the funds from a sale are returned to the cardholder. This usually happens when the cardholder disputes a charge with their issuer.
How can I avoid chargebacks?
There are a few things you can do to avoid chargebacks:
- Use clear and concise descriptions of your products or services.
- Include your company name and contact information on all invoices and receipts.
- Keep track of your customer's contact information and purchase history.
- Respond quickly to customer inquiries and complaints.
What are my rights as a merchant?
As a merchant, you have the right to dispute a chargeback limit if you believe that it is unwarranted. You will need to provide evidence to support your case, and the issuer will make a decision based on the information you provide.
If you are the victim of fraud, you have the right to file a police report and to cooperate with law enforcement in their investigation.
What are the consequences of chargebacks?
Chargebacks can result in the loss of merchandise, as well as increased fees and charges from your credit card processor. In some cases, your merchant account may be suspended or terminated if you have too many chargebacks.
What is the difference between a chargeback and a refund?
A refund is a voluntary return of funds by the merchant, while a chargeback is an involuntary return of funds initiated by the cardholder's credit card issuer. Chargebacks are generally more expensive for merchants, as they may be charged additional fees by their credit card processor.
I hope this guide has been helpful in understanding chargebacks and your rights as a merchant. If you have any further questions, please feel free to contact us.