What is a Chargeback (Infographic)

A chargeback is a processed credit card transaction that is reversed (charged back) to a merchant because the customer or customer’s bank finds something wrong with the transaction. They happen for a variety of reasons. The primary reason a chargeback is triggered is customer dispute. Other reasons include fraud, credit card processing errors, authorization issues and non-fulfillment of copy requests. Every chargeback is assigned a reason code — a two digit number used to indentify why a chargeback occurred. Reason codes may vary by VISA, MasterCard and Diners.

So how exactly does the chargeback cycle work? Here’s a graphic to better visualize the process:

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<img src="http://www.merchantexpress.com/blog/wp-content/uploads/2012/06/chargeback-cycle.jpg" alt="What is a chargeback" width="710" height="1569"></a><br /><span style="margin-left:15px; font-size:10px;">Merchant Express: <a href="http://www.merchantexpress.com/">Credit Card Processing</a></span>

Every merchant that offers credit card processing to its customers should be concerned about chargebacks to their merchant account. When the card-issuing bank requests a merchant refund on your customer’s behalf, additional processing fees will be charged. This makes the chargeback something merchants should seriously avoid.

Lower your risk of chargebacks by following the tips below:

• Verify card logos, credit card numbers, identification, customer signature and check the expiration date.
• Call for voice authorization if the card stripe doesn’t work or if the terminal is down or cannot authorize.
• Authorize every transaction.
• Be sure your customers are familiar with your return or exchange policy.

Merchant Express forms an alliance with our merchants. We provide assistance for every aspect of the credit card processing experience. Contact a representative to learn more about credit card processing best practices that can help you grow your business.