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•White Paper: Chargebacks 101: What Is A Chargeback?
By Accertify
A chargeback occurs when a credit cardholder contacts their credit card-issuing bank to initiate a refund for a purchase made on their credit card. Chargebacks arise for a variety of reasons but generally they are the result of a cardholder changing their mind, being dissatisfied with their purchase or a case of fraud. The fraud can result from the unauthorized use of their credit card (stolen card) or the cardholder purposely seeking to dispute a legitimate purchase they made ("friendly fraud").
Merchant's not only incur losses due to non payment of services rendered or goods delivered, but also face additional burdens caused by chargebacks. Most card issuing banks assess an administration fee to the merchant for processing the chargeback ranging from $25 to $100 per occurrence. In addition, the card associations can get involved when merchants are hit with excessive chargebacks over an extended period of time. If these merchants continue to experience high loss rates, the associations may fine the merchants' acquirers or direct the acquirer to stop processing cards for the merchant.
Retail businesses can perform certain actions that significantly limit their exposure to chargebacks, including physically handling the credit card and obtaining the cardholder's signature at the time of sale. These steps limit the retail merchant's risk of loss if a chargeback occurs. Online merchants do not have these same advantages since they never see the card or the individual who initiates the purchase.
Click Here To Download:
•White Paper: Chargebacks 101: What Is A Chargeback?
