![]() This is the first stage in the chargeback process: the customer buys a product from a merchant, either in-store or online. To qualify for a chargeback, a purchase must be made. ![]() There’s a specific process that a customer, retailer, and bank goes through when dealing with chargebacks. A lack of proof or a returns policy that goes against consumer rights law means the customer wins the chargeback. The bank handling the chargeback will ask a retailer for proof of delivery or its refund policy. There’s no loophole a retailer could jump through to keep the money they’ve made from selling a defective item.Ĭhargebacks also prevent merchants from not delivering products or failing to give refunds. Should they sell a sub-par version of an item, the customer is entitled to request a chargeback. The possibility of a chargeback prevents merchants from selling defective products. They also keep retailers accountable for selling high-quality products. But it’s not just fraudulent activities that credit card chargebacks help with. Keep merchants honestįinancial crime is a good enough reason for chargebacks to exist. If their credit or debit card is cloned and used to make fraudulent in-store transactions, they can request a chargeback from their bank. Should someone skim their card details and use their bank account to buy something online, customers can request a chargeback and get refunded for the item they didn’t buy.Ĭustomers are also protected from card cloning. They protect customers against criminal fraud. The purpose of credit card chargebacks Security for customersĬhargebacks exist to make it safer for customers to shop. But if the bank rules in your favor, they’ll send the disputed funds back to you. These fees usually cost a minimum of $25 per incident, and they can quickly add up. To add insult to injury, retailers are also charged a fee by the merchant services provider to investigate and resolve the chargeback. ![]() If the bank rules against the retailer, the funds are returned to the cardholder. With a chargeback, the banks get involved and the disputed funds are held from the business until the payment card issuer works things out and decides what to do. With a return, the customer gives the goods back to the retailer and gets a refund on the money they’ve spent. Also referred to as a payment dispute, it may sound like a return, but it’s completely different. ![]() How to protect your retail store from fraudulent chargebacksĪ chargeback occurs when a cardholder questions a transaction and asks their card-issuing bank to reverse it. ![]()
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