Chargeback

When a customer disputes a credit card charge with their bank, which forces the payment to be reversed, leaving the seller with a refund and sometimes a penalty fee.

Chargebacks cost you the product, the sale, and sometimes an additional fee. High chargeback rates can result in your payment processor terminating your account.

A customer claims she never received a parcel and disputes the payment with her bank. The founder loses £85 and must pay a £15 chargeback fee to her payment processor.