What is a chargeback?

A chargeback is a reversal of a credit card transaction initiated by the cardholder’s bank, typically due to disputes such as fraud, unauthorized transactions, or dissatisfaction with goods or services. It allows consumers to recover funds directly from their bank rather than resolving issues with the merchant. Chargebacks can be costly for merchants, as they incur fees and can impact their reputation and relationships with payment processors. The process is designed to protect consumers and ensure fair practices in transactions.