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Online Security » Protect Your Business » Protect Your Business from Chargebacks

As the number of fraudulent transactions is rising at significant rates, businesses, especially those taking place via the Internet are on the risk of having to pay expensive chargebacks. This is due to the fact that in online sales (and also in phone or mail order sales), one cannot see the credit card, or if the person using it is indeed the cardholder. This disadvantage often leads to fraud.

What is in fact a chargeback?

Chargebacks name the reversal of a sales transaction, that is the credit card charges are reversed. It takes place between two parties: the issuer of the credit card and the merchant's bank (the acquirer). In the chargeback process there is no direct relationship between the cardholder (for the issuer) and the merchant (for the acquirer). After a charge is disputed and adjudicated in the cardholder's favor, the transaction total and chargeback fee are deducted from the merchant's account.
The term it is also known as "Debit Memo".



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