What is a chargeback?
A chargeback occurs when a bank reverses a credit or debit card transaction at a customer's request. This is a protection measure for cardholders to ensure unauthorised transactions are challenged with their bank which consequently initiates a chargeback to merchants to refund the transaction payment.
What is the difference between a chargeback and a refund?
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Refund |
The customer returns an item to the merchant, and the merchant handles the refund. |
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Chargeback |
The customer disputes a transaction with their bank, and the bank handles the reversal. The merchant loses the sale and incurs a chargeback fee of 20 EUR per chargeback. |
Who is involved in the chargeback process?
- Cardholder (customer) and their issuing bank;
- Merchant and their acquiring bank;
- Card schemes oversee the process.
What is the limit for a chargeback request?
Chargebacks can be initiated up to 120 days after the transaction date.
What are the most frequent reasons for a chargeback?
- Unauthorized or unrecognized transactions;
- Merchant did not obtain proper authorization;
- Customer did not receive the product or service;
- Product or service was defective or not as described;
- No cancellation policy was provided at the time of purchase.
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