Chargebacks

A chargeback is a procedure whereby a card holder or the card holder’s bank disputes transactions put onto a credit card.

What is the Process of a Chargeback?

The merchant's account is debited along with any contractual chargeback fee(s) and the merchant must provide proof that the transaction is valid and satisfactory to the rules and regulations of Visa® and MasterCard® to get money back.

1. Bank or processor receives a chargeback from the issuing bank.
   
2. Bank or processor mails notification of chargeback to the merchant, and the amount of the chargeback plus a handling fee (deducted from merchant’s settlement account). If more documentation is required to clarify the chargeback, then it is sought from the cardholder’s bank.
   
3. If a merchant feels that a chargeback is invalid, then the merchant may send his rebuttal and supporting documentation, in a timely manner. Typically the merchant is required to respond within 10 days of the receipt of the chargeback notification.
   
4. If the merchant has a valid rebuttal, then the Bank or processor re-presents the item to the issuing bank and reclaims the funds for the merchant.