Chargeback is a process of protesting transactions by an issuing bank, where the payment amount is debited from the acquiring bank without acceptance and the sum is returned to the payer. In fact, the technology of refund is used in the systems of settlements on plastic cards.
In other words, this procedure is a tool due to which the bank may require and receive a cash refund from an acquirer if there is a claim from its own client.
In general, the bank has obligations to its own client within the normative legal acts, as well as the concluded agreement. Types of chargebacks are regulated by the requirements of payment systems and also the banks participating in the contract.
In particular, the cardholder may protest transactions in several cases:
- the operation was not committed;
- the operation was processed incorrectly;
- the service paid by the card is not actually provided.
So, for this purpose, the payment system provides banks with various tools, including a chargeback procedure: so that cardholders have the opportunity to protect their own interests in the disputable situations listed.
It is necessary to understand that chargeback determines exactly the procedure of work on disputed transactions between two banks, and not between the card owner and the bank. The cardholder must carefully examine the offer contract, which is concluded with the bank upon receipt of plastic. After all, it is in it that bankers report what services and opportunities they will provide for this particular product, within what time frame and under what conditions a return of funds is possible. Usually, for each specific case of a protest, a separate study of the issue by the card issuer is required.