Finance
How does a chargeback work?
A chargeback is when a card payment is reversed after a customer disputes it with their bank — for fraud, a faulty product, or a charge they didn't authorize. The bank investigates and, if the claim holds, pulls the money back from the merchant.
See it in motion.
Watch a 2-minute animated lesson that shows exactly how a chargeback works.
Step by step
- 1A customer disputes a card charge with their bank.
- 2The bank investigates the claim.
- 3If valid, the payment is reversed from the merchant.
- 4It protects buyers from fraud and bad transactions.
Frequently asked questions
- How does a chargeback work?
- A cardholder disputes a charge; the bank investigates and, if justified, reverses the payment from the merchant.
- When can you request a chargeback?
- For fraud, unauthorized charges, undelivered goods, or significantly misrepresented products.
- How is a chargeback different from a refund?
- A refund is given voluntarily by the merchant; a chargeback is forced by the bank after a dispute.