what is a chargeback

A chargeback is a return of money to a payer of a transaction, especially a credit card transaction. It reverses a money transfer from the consumer's bank account, line of credit, or credit card. Chargebacks can occur when a customer disputes a card transaction, and they are governed by regulations such as Regulation Z of the Truth in Lending Act in the United States and Regulation E of the Electronic Fund Transfer Act for debit cards. They are meant to act as a consumer safeguard, providing protection from issues such as not receiving credit for returned merchandise, not receiving items paid for, or receiving items that were not as expected. Chargebacks can be initiated by either the merchant or the cardholder's issuing bank, and merchants typically incur a fee from the card issuer when a chargeback occurs. The chargeback process involves multiple entities and can take several days to settle. It is important for businesses to understand how to prevent chargebacks and work with their payment processing company to dispute them effectively