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What is a chargeback?

What is a chargeback?

A chargeback is a reversal of sales transaction previously processed by your business. The amount of the original transaction is deducted from your merchant account. Chargebacks are usually initiated by the card holder, but can also be initiated by the card holder’s banks.

The most common reasons for chargebacks are: 

  • Fraudulent use of a credit card
  • Dissatisfaction with service or merchandise
  • Duplicate charges
  • Invalid card number

The card holder typically has 120-180 days depending on the dispute from the initial date of the transaction to challenge that transaction. Once the chargeback is initiated, the merchant has only 30 days to respond. Paysafe requests that you respond within a shorter timeframe to account for possible posting delays between the Issuer and the Merchant Bank.

Paysafe can manage and help prevent future chargebacks

Paysafe strives to limit merchant losses by acting as merchant advocate while resolving disputes with the card issuing banks, and also through education on chargeback prevention.

For more information on how Paysafe can help you reduce chargebacks, contact us today.

More payment definitions?

Asking yourself “what is PCI compliance?” Find out about more payment terminology from our Payments Glossary.