What is a Credit Card Chargeback?
A chargeback is the reversal of a previous sales transaction on a person’s credit card. This is usually the result of the cardholder or card issuer disputing the charge posted to their account. Chargebacks usually occurs after the disputed charges have been investigated and is found in favor of the cardholder or card issuer.
The most common situations resulting in a chargeback include:
- Charges you do not recognize that appears on your credit card statement
- Being charged for something you did not receive
- Being charged multiple times for the same purchase
- An incorrect account number being captured, resulting in a transaction being posted to the wrong account
- A transaction being charged for an incorrect amount
If you believe there was a billing error on your statement, you must, within 60 days following the date of your statement, write a letter to the card issuer to have the charges disputed. A chargeback would then occur once the chargeback process has been completed and the money is refunded back to his or her account. The card issuer then charges the refunded amount back to the original merchant, along with an additional penalty fee.
Generally, customers would first attempt to correct the problem with the merchant. If that fails, their last resort would be to make an appeal to their credit card issuer to get their money back by disputing the charges. Once a complaint has been made, a short investigation is conducted and the money is posted back to the cardholder’s account after the dispute resolution process has been completed.
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