Glossary

Chargeback

Formal dispute of a charge, opened by the cardholder with the issuing bank, that can reverse the value of the sale.

A chargeback is the formal dispute of a card charge, opened by the cardholder with the bank that issued the card. If the dispute is accepted, the value of the sale is reversed to the buyer, and the seller loses both the product or service delivered and the money from the sale.

A chargeback is different from a refund: the refund is initiated by the seller themselves, while the chargeback is a dispute that goes through the issuing bank and the card network. A high chargeback rate can lead a payment platform to suspend or close the seller's account.

A chargeback ratio never spikes, it climbs quietly. By the time the platform warns you, three months of damage is already booked. Anyone watching it week by week is never caught off guard.
Wellington CostaGlobal Payments Specialist

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Written by Wellington Costa Global Payments Specialist

Writes about payment infrastructure, checkout conversion and chargeback reduction. Works directly with digital product sellers, affiliates and creators selling to more than 40 countries through Mundpay.