A Chargeback happens when a consumer requests that their credit card company process a refund. The credit card company will then access the merchant’s bank account or contact the transaction payment system company and ask to remove the amount that the customer requested. At this point, the issuing bank, payment gateways, and or the merchant’s bank can charge the merchant a fee for the chargeback cost.
A chargeback occurs if the customer suspects fraud or experiences dissatisfaction with the product or service. This occurs more frequently in eCommerce businesses because the customer may or may not experience fraud or may become dissatisfied without being directly contacted. There are, however, many ways that eCommerce businesses that use Magento® can reduce the frequency of chargebacks, these are:
- Provide full details of the product or service, such as size, weight, description and images.
- Specify delivery methods, delivery dates and times.
- Provide a detailed refund policy.