What is a chargeback

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If you accept credit cards in your online store, you might have to deal with chargebacks. A chargeback is a demand made from a bank to return funds to a cardholder.

When a cardholder has an issue with a charge on their card, they contact their bank and dispute this charge. The cardholder can be your customer or just a person who thinks that their card was fraudulently used for buying something in your store.

The bank opens a dispute for a chargeback and you can try to resolve it by replying and providing evidence that the transaction was legitimate.

Chargebacks can happen if a credit card or PayPal account was used illegally for buying something in your store. If you receive a chargeback, you need to contact your payment processor immediately. See more about detecting and preventing fraud.

The bank or the credit card company that issued the card reviews the evidence to make a decision. Then they close the chargeback in either your favor or the cardholder's favor. If you win the chargeback, you get the disputed amount. If the cardholder wins the chargeback, the disputed amount is returned to them.

There can be situations when it is better to ask your customer to close the chargeback dispute and issue a refund to them yourself. See our guide about refunding your orders.
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