This article provides an overview of what a chargeback is and when you can raise one.
What is a chargeback?
A chargeback is when a payment is returned to the card holder (via the card scheme) where a refund could not be agreed between the merchant and the customer.
When can I raise a chargeback?
Typically chargebacks are raised where the goods or services paid for are not received, or if you are not satisfied with a product or service, and the merchant refuses to rectify the issue directly or cannot provide a refund. There are certain timeframes you must follow when raising a chargeback.
A common example is where a customer books a flight which is subsequently cancelled. If the airline will not provide a refund, the customer has the right to raise a chargeback.
Chargebacks can also be raised where a card has been used fraudulently.
Who is involved in the chargeback query ?
- The Cardholder: The person or entity who made the card purchase that is in dispute
- The Issuer: The institution that provides the card to the cardholder. Often there are intermediaries, and the card is provided to the card holder via another card services institution.
- Acquirer: The institution that obtains the right to the merchant accounts and is tasked with taking a payment on the merchant's behalf. Again, there are intermediaries involved known as merchant services providers.
- The Merchant: The business of a person supplying the goods and services being paid for.
- Card Scheme: Provide connectivity between the Issuer and Acquirer, enabling people and organisations to make card payments.
How does the chargeback flow work?
