Chargeback

A chargeback is a reversal of funds from a merchant's bank account back to a consumer's bank account, initiated not by the merchant, but by the consumer's issuing bank or credit card company. This powerful mechanism primarily serves as a form of consumer protection, allowing cardholders to dispute unauthorized transactions, purchases for goods/services not received, or billing errors. While safeguarding consumers, chargebacks can be a significant financial burden for merchants, leading to lost revenue, punitive fees, and increased administrative costs associated with dispute resolution.