Chargeback

Chargeback in German is called Rückbuchung.

A chargeback is a reversal of a card payment that has already been processed. They often occur when a customer disputes a transaction or when there is a problem with the transaction.

Chargeback

A chargeback, also known as a chargeback, is a process by which funds flow from a merchant back to a cardholder, typically as a result of the cardholder successfully disputing a transaction. Chargebacks can occur for a variety of reasons, including fraudulent transactions, dissatisfaction with a product or service, technical problems during the payment process, and processing errors.

In the chargeback process, the cardholder initiates the request for a chargeback by his card-issuing bank. The bank reviews the request and, if it is justified, the money is transferred from the merchant bank back to the card-issuing bank and then to the cardholder.

Although chargebacks are a necessary consumer protection tool, they can be costly for merchants as they can lose not only the value of the transaction, but also an additional fee. Therefore, it is important that merchants implement best practices for avoiding chargebacks, such as clear return policies, accurate product descriptions and excellent customer service.

Chargeback examples

An online electronics store could be subject to a chargeback if a customer reports a transaction as fraudulent because they never received the merchandise they purchased.

A consumer buys a product from an online retailer and expects it to be delivered within a certain period of time. If the product does not arrive within that period, or if the delivered product differs significantly from the description shown on the website, the consumer may decide to request a chargeback. In this case, the consumer would contact their card-issuing bank and dispute the transaction as unsatisfactory. If the bank deems the consumer's request to be justified, it will initiate the chargeback process and the cost of the transaction will be deducted from the merchant account and returned to the consumer's account.

Chargeback FAQ

  • Chargebacks can be for a variety of reasons, such as fraudulent transactions, goods not received, or services declined. Customers use this option to revoke invalid charges.

  • A chargeback can mean financial losses for the merchant. In addition to the loss of sales proceeds, additional fees and penalties from credit card companies may apply.

  • To avoid chargebacks, merchants should have transparent terms and conditions, offer clear return and refund policies, and improve customer service. Secure payment methods and fraud prevention solutions can also be helpful.

  • A chargeback is a specific form of chargeback managed by credit card companies. Chargebacks can also occur in other contexts, such as wire transfers or bank transactions where the customer reports an invalid or unauthorized transaction.

  • After a chargeback, the merchant should review the case, provide relevant documents and appeal if necessary. Proactive communication with the cardholder and cooperation with the payment provider are recommended.