- The term ‘chargeback’ describes the process that happens when one of your customers reports a fraudulent or otherwise unsatisfactory transaction to their credit card issuer – and the issuer is then legally obliged to refund them. The credit card company will forward the charges to you, along with a code and the reason for the chargeback. There are many reasons for chargebacks, for example:
- The shipment did not arrive
- The wrong goods were delivered
- The goods were defective or damaged
- The documentation supplied was missing or incomplete.
If you, as a merchant, unintentionally accept a fraudulent transaction, a chargeback will occur as soon as the actual credit card holder realizes that unauthorized orders were made with their credit card. Your aggrieved customer must then be credited for the amounts charged – and you have lost the goods ordered and shipped.
Learn how you can protect your business from chargeback fraud: https://riskident.com/en/whats-fraud/