Category: Chargebacks
What is a chargeback, and why do they get issued?
When a customer decides to dispute a charge made to their debit or credit card, it is referred to as a chargeback. The chargeback initially results in the debit or credit card charge being reversed and the funds that you received for the payment being returned to the customer. Chargebacks were introduced as a form […]
How are chargebacks reported to merchants?
After conducting an investigation, if an issuer determines that a chargeback right applies, it will send the transaction back to the acquirer and charge back the dollar amount of the disputed transaction. At this point, the acquirer investigates the transaction to see if the chargeback is valid. If it is, the amount of the chargeback […]
Why are e-commerce merchants liable for fraud?
E-commerce merchants accept card-not-present (CNP) transactions, which means neither the cardholder nor the physical card are present during the transaction. Since there is inherent risk in accepting these CNP transactions, the merchant accepts liability for each transaction (rather than the issuer). By making e-commerce merchants liable for fraud rather than the issuer, it means that […]
What is a chargeback ratio?
A chargeback ratio (sometimes known as a chargeback-to-transaction ratio or CTR) can be calculated by taking the number of chargebacks the acquirer received for a merchant in a calendar month (say, June), and dividing that by the number of sales transactions processed by the merchant in the month prior (May). Most card brands require that […]
What is the difference between the chargeback amount and the representment amount?
In the case that a merchant chooses to fight a chargeback, there may be a difference between the chargeback amount and representment amounts. Neither may be equivalent to the full transaction amount. In some cases, cardholders may opt to file a partial chargeback, rather than a full chargeback. This can happen if the cardholder claims […]
What is a high-risk business?
Credit card companies will label a business or merchant as high-risk based on the industry the merchant is involved with and other factors, such as age of the business, number of chargebacks incurred and credit history.* High-risk merchants can still accept credit card payments, but banks might charge a higher processing rate or ask for […]
What is a bank chargeback?
Before we start talking about bank chargebacks, we want to give a quick refresher on chargebacks: When a customer decides to dispute a charge made to their debit or credit card, it is referred to as a chargeback. The chargeback initially results in the debit or credit card charge being reversed and the funds that […]
What are chargebacks, and why do they get issued?
When a customer decides to dispute a charge made to their debit or credit card, it is referred to as a chargeback. The chargeback initially results in the debit or credit card charge being reversed and the funds that you received for the payment being returned to the customer. Chargebacks were introduced as a form […]
What are MCC codes?
When a merchant begins to accept credit cards, the card companies assign a four-digit number to the merchant, detailing its business category. This code is known as the Merchant Category Code. While some merchant category codes are more general, such as Roofing – Contractors, Boat Rentals and Leases, or Florists, some larger corporations have their […]
What are credit card chargebacks?
To say we’re relieved that you want to learn about credit card chargebacks is an understatement. We at Verifi, want you to be armed with as much information as possible so you can protect your business. A chargeback occurs when a customer disputes a charge on their debit and credit card. Until you can prove […]