Chargeback

A Chargeback occurs when a customer reports a transaction as unauthorized, fraudulent, or incorrect, and requests the bank to reverse the payment.

The bank investigates the claim and may return the money to the customer while reviewing the case. Chargebacks are common in credit/debit card transactions and online payments.

In India, payment disputes and systems are regulated by the Reserve Bank of India.

Common Reasons for Chargeback

• Unauthorized or fraudulent transaction
• Duplicate charges
• Product not received
• Service not as described

Chargeback Process

1. Customer raises dispute with bank
2. Bank temporarily reverses the amount
3. Merchant provides proof of transaction
4. Final decision is made

Impact of Chargeback

[Image illustrating the costs of chargebacks to merchants, including lost merchandise, shipping costs, and bank fees]

• Loss of revenue for merchants
• Additional fees and penalties
• Possible account restrictions for repeated cases

Why Chargeback Matters

• Protects consumers from fraud
• Ensures fair transaction practices
• Maintains trust in digital payments

"If you see an unknown ₹2,000 charge on your credit card, you can request a chargeback to reverse the transaction."