Term – Chargeback
Summary – The word no merchant wants to hear, chargeback. A chargeback can be defined as when a cardholder disputes a card transaction with their issuing bank. You can imagine a chargeback like a reversal. Chargebacks were introduced to protect cardholders against unauthorized or even fraudulent transactions. Another reason they were introduced was to protect cardholders from merchants who did not fulfill their obligations.
As you can imagine, losing 100% of the sale price and not having your product or investing time into a service is irrecuperable, thus a major frustration. To add insult to injury, you will have a chargeback fee with most companies. On top of the lost capital or time, you also have to fight the chargeback which can require gathering of several documents to “build your case”. Chargebacks can happen with both traditional merchant processing accounts and even cash discount programs.
Merchants are always encouraged to do everything possible to mitigate chargebacks such as providing clear product descriptions, terms and conditions, fantastic customer service, and a transparent return/refund policy.
An excessive amount of chargebacks can get your merchant account cancelled as the merchant processing company may view your account as high-risk. It is strongly recommended to do everything possible to limit the total number of chargebacks.
If you have any questions on how Eliminate Card Fees can eliminate all processing fees give us a call to learn more at 877-624-8043Back to Terms
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