Chargeback
A chargeback is a mandatory reversal by the card issuer to the merchant, usually after a dispute or fraudulent transaction by the cardholder.
Chargebacks protect consumers from illegitimate credit card charges. The customer reports an issue to their bank (not received, unrecognised, fraudulent); the bank pulls the amount back from the merchant and charges a chargeback fee. For merchants it's a cost plus reputational risk (high chargeback rates trigger higher fees or exclusion from networks).
Example
A customer claims a digital product was never received. The merchant must prove delivery (login logs, download records). Fails: amount + €15-25 chargeback fee lost.
Frequently asked questions
What's the chargeback-rate threshold?
Visa/Mastercard: >1% chargebacks triggers increased oversight. >1.5% can lead to exclusion from the network. Healthy merchants sit well below 0.5%.
Related terms
Further reading
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