Chargeback

A chargeback happens when a customer contacts their bank to dispute a charge on their account. The bank then reverses the transaction and takes the money back from the retailer — sometimes without much warning.

Chargebacks were originally designed to protect consumers from fraud. But they can be a real headache for ecommerce brands. In some cases, customers dispute legitimate purchases, something known as 'friendly fraud'.

Common reasons for chargebacks include:

• The customer didn't recognise the charge on their statement
• The product never arrived
• The item wasn't as described
• Genuine fraudulent activity on the customer's account

To protect yourself, keep detailed records of orders and delivery confirmations. And make sure your brand name is clearly recognisable on bank statements so customers don't mistake your charge for something fraudulent.

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