![]() They comprise a system for adjudicating transaction disputes between cardholders and merchants, primarily where the issues can be resolved based on documentary evidence incident to the transaction. Card association chargeback rules are available online for public inspection and review. Chargebacks can also occur as a result of friendly fraud, where the transaction was authorized by the consumer but the consumer later attempts to fraudulently reverse the charges. Chargebacks provide a means for reversal of unauthorized transfers due to identity theft. The threat of forced reversal of funds provides merchants with an incentive to provide quality products, helpful customer service, and timely refunds as appropriate. ![]() Similar rights extend globally, pursuant to the rules established by the corresponding card association or bank network.Ī consumer may initiate a chargeback by contacting their issuing bank and filing a substantiated complaint regarding one or more debit items on their statement. United States debit card holders are guaranteed reversal rights by Regulation E of the Electronic Fund Transfer Act. Holders of credit cards issued in the United States are afforded reversal rights by Regulation Z of the Truth in Lending Act. The chargeback mechanism exists primarily for consumer protection. The distributor submits a chargeback to the supplier so they can recover the money lost in the transaction. In the distribution industry, a chargeback occurs when the supplier sells a product at a higher price to the distributor than the price they have set with the end user. The chargeback is ordered by the bank that issued the consumer's payment card. The chargeback reverses a money transfer from the consumer's bank account, line of credit, or credit card. ( Learn how and when to remove this template message)Ī chargeback is a return of money to a payer of a transaction, especially a credit card transaction. ( April 2014) ( Learn how and when to remove this template message) You may improve this article, discuss the issue on the talk page, or create a new article, as appropriate. ![]() The examples and perspective in this article may not represent a worldwide view of the subject.
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