What Is Chargeback?
A reversal of a credit card payment initiated by the cardholder's bank.
Detailed Explanation
Chargebacks can result from fraud, billing errors, or customer disputes. The merchant bears the burden of proof and may also incur a chargeback fee.
Example
A client disputes a $2,000 invoice payment, and the bank issues a chargeback while the case is reviewed.
Why It Matters
Excessive chargebacks increase processing costs and can jeopardize merchant account standing.
Related Resources
Related Payment Terms Terms
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