Hi, I’m Melissa Blackburn with 2Checkout,
and today we’ll be talking about Chargebacks. A Chargeback is a transaction in which an
issuing bank transfers funds from a merchant back to a consumer because of a dispute. So
how does a Chargeback work? When a consumer is either unhappy with a product or service
or didn’t receive a product or service he or she purchased, a customer’s last resort
is to contact his or her bank or credit card company after trying to resolve the issue
with the merchant. The credit card company, as a last option, issues a refund to the consumer,
compensating the consumer for his or her stated loss. Other reasons for a chargeback include
bank processing errors, duplicate billing, identity theft, disputes over price charged
and processed, or missed refunds. Merchants may suffer heavy penalties for chargebacks.
Acquiring banks and payment service providers may charge fees for every chargeback a merchant
experiences. If merchants receive too many chargebacks, they will no longer be given
permission to accept credit cards. That is why it is always in the merchant’s best
interest to issue a refund before a chargeback occurs.