Chargeback Process

Here is how the Chargeback Process Works

1. One of your clients or shoppers has a problem with a transaction that took place at a merchants site.
2. The shopper informs their credit card issuer about the problem and asks for their money back.
3. The card issuing bank then reimburses the shopper the amount of the disputed transaction.
4. The card issuing bank then starts a special process, called chargeback, and obtains funds from the merchants processing/acquiring bank that will in turn debit the amount directly from the merchants bank account along with the chargeback processing fees.
5. The acquiring bank sends a Notification of Chargeback (NoC) and a Request for Information (RFI) to the merchant.
6. The merchant provides documentation to the shoppers issuing bank to dispute the NoC.
7. If the merchant provides sufficient amount of documentation to show they did not deserve the chargeback then the card issuing bank will reimburse the merchant and debit the shopper the disputed amount.  If the information is not sufficient then the merchant looses the chargeback dispute and the money is gone for good.

One Response to “Chargeback Process”

1. What is a High Risk Merchant? Says:
   September 1st, 2009 at 2:43 pm

   [...] merchant transacts business in a merchant category where loss-causing events (such as excessive chargebacks) are likely to [...]

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