Visa and MasterCard have made important changes to merchant acceptance as part of a proposed settlement for merchants located in the U.S. and U.S. territories. For more information click here.

What is a chargeback?

A chargeback is a transaction disputed by the cardholder or card issuer. There are many reasons for chargebacks, but the most common are returned merchandise, terminated services, disputes, errors, or fraud. Merchants must be able to provide proof that the disputed transaction is valid and in accordance with Visa/MasterCard regulations or risk having their account debited for the disputed amount..

What does a chargeback mean to me?

For your business, a chargeback translates into extra processing time and cost, a narrower profit margin for the sale, and possibly a loss of revenue. It is important to carefully track and manage the chargebacks that you receive, take steps to avoid future chargebacks, and know your representment rights. In addition, you should also take measures to recover losses from customers who are financially liable for transactions that were charged back to your business.

How do I avoid chargebacks?

To avoid chargebacks, act promptly if contacted directly by the cardholder to resolve a dispute. By working directly with the cardholder, you can avoid costly fees and processing costs as well as promote goodwill with your customer. If the cardholder does not contact you, respond to inquiries from Merchant Services with as much information as possible about the sales transaction in question.

We have also prepared some tips to help prevent chargebacks, simply click here to review or view a list of preventable chargebacks by Reason Code. You can also look at our guide of Frequently Asked Chargeback Questions where you can find helpful information such as:

  • How long does a cardholder have to dispute a transaction?
  • Why is there a chargeback fee?
  • Why did I get a chargeback when I received an approval code?
  • Why was I debited without being notified?

Where can I find the status of my chargebacks?

The status of your most recent chargebacks can be found in the Reporting Section.