What is chargeback management ?

Chargeback management involves handling disputed transactions, where a customer requests a refund from their bank or credit card issuer. Effective management of chargebacks is crucial for maintaining healthy financial operations. It requires thorough documentation and a clear understanding of chargeback policies.

Example: A subscription box service might encounter chargebacks if customers dispute charges due to issues like damaged products or unexpected fees. The company must then provide evidence to support their case.

Is chargeback reliable?

Chargebacks are a reliable option for clients seeking to protect themselves from fraudulent or unsatisfactory transactions. They provide a structured way to resolve disputes, although potential misuse of the system can complicate matters for both clients and merchants.

However, they can be misused by some customers, leading to financial losses for merchants. Additionally, a high number of chargebacks can damage a merchant's reputation and may result in increased fees or the termination of their merchant account.

Are chargebacks automatic?

Chargebacks are not automatic; they require the customer to take action to initiate the process. The bank must review the claim before processing any chargeback, which adds a layer of scrutiny to the system.