A chargeback is the return of card funds used to make a purchase at a merchant. A chargeback may occur if a consumer disputes a purchase made with his or her card, alleging that it was fraudulent or without his or her consent.
When the cardholder makes the complaint, the issuing bank involved reverses the charge, refunds the client the full amount of the purchase, and charges the amount to the company's account. At that point, the issuing bank creates a chargeback request. This request is forwarded to the payment facilitator, in this case PagueloFacil, which proceeds to communicate to the merchant involved.
Most chargebacks are initiated due to fraud, but sometimes the consumer initiates a claim after receiving an item. In that case, it is not a true fraudulent transaction.
When the card issuing bank issues a chargeback request, it indicates the reason for the cancellation of the purchase, which may fall into one of four general categories:
- Fraud: the purchase was not made with the buyer's knowledge or consent. This is the most common reason for a chargeback.
- Quality: the buyer never received the item they paid for, or the product or service was not what was expected.
- Duplicate charge: the buyer was billed more than once for the same item.
- Credit not processed: A refund is due for a cancelled product or service, or duplicate payment, and this action has not been executed.