Payments
Chargeback
A chargeback is a forced reversal of a card payment initiated by the cardholder's bank, usually following a dispute about fraud, non-delivery or misrepresentation. The merchant loses the transaction amount plus a chargeback fee, and excessive rates can end the processing relationship.
In plain terms: A customer's bank taking the money back, plus charging you a fee for the trouble.
Why it matters
The cost is not only the disputed amount. Processors run chargeback rates against thresholds, and sustained rates above roughly 1% put an account into monitoring programmes and eventually terminate it.
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