What is a Credit Card Chargeback?

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As husband and wife, Leroy and Mary share a credit card account. However, Mary does not always tell Leroy when she makes purchases. One afternoon, Leroy receives his billing statement and does not recognize a charge on the account. The billing descriptor does not make sense to him either. As a result, Leroy calls his credit card issuing bank and asks for his money back. He has initiated a credit card chargeback.

From there, Leroy's credit card issuing bank will contact the acquiring bank used by George, an honest and successful merchant who sells weight loss supplements. George's acquiring bank then contacts him and informs him of the chargeback — giving him five days to respond. George can let the chargeback go and allow Leroy's credit card issuing bank to return his money or he can dispute the credit card chargeback and prove that the cardholder purchased the goods and benefited from it.

Disputing a Credit Card Chargeback

You may be wondering how George can prove that Leroy purchased his goods and benefited from them. Well, he cannot. He can, however, prove that Mary, the secondary cardholder on George's credit card account, ordered weight loss supplements and received them on time.

Although George did not properly optimize his billing descriptor to allow cardholders to identify his business, he does have on record that Mary authorized the transaction. He also used a shipping service that required Mary to sign for the package upon receipt.

Chargebacks Verses Refunds

When most consumers think about getting their money returned to them, they consider it a refund. However, there is a great difference. Learn about the many similarities and differences between chargebacks and refunds.

About Instabill

Instabill is an international merchant account provider that works with storefront and online businesses worldwide. We perform due diligence on each inquiring merchant to ensure that the goods and services they offer are done so with integrity, honesty, and, most importantly, security. Instabill works hard to reduce the number of fraudulent merchants processing credit cards online as well as the number of fraudulent consumers making illegal purchases.

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In Chargebacks 101 for Merchants, Instabill teaches business owners about the chargeback process and chargeback reversal process. Instabill also offers advice on how to prevent chargebacks as well as credit card fraud.

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In Chargebacks 101 for Consumers, Instabill clearly identifies the similarities and differences between refunds and credit card chargebacks. Consumers can learn what situations are best for each type of transaction.

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Instabill is an Internet payment service provider with more than 12 years of credit card processing experience. Learn more about Instabill as well as why the company created the website Instabill.org.

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