A chargeback is any transaction that has been disputed by the cardholder with their bank for being unauthorized or incorrect. Typically, a cardholder has 120 days from the date of the payment to dispute the charge.
Reasons a cardholder might dispute a charge:
- Services not received
- Duplicate processing
- No credit was issued when requested by the cardholder
- Improper authorization
- Dissatisfied cardholder
What to expect when a chargeback occurs:
- Your business bank account will be debited for the amount of the disputed transaction.
- You will receive a letter via mail from the credit card processor telling you the details of the disputed transaction.
- To dispute the charge, you must respond with the requested documents within the timeframe listed in the letter.
- The processor will make a determination on the disputed transaction and will either return the disputed funds to your bank account or return the funds to the cardholder's account.