Charge Back

A transaction that has been disputed by the cardholder or issuer is sent back through interchange to the acquirer, and must be resolved by either the acquirer or the merchant. A reversal of a credit card transaction, typically initiated by the transaction card issuer at the cardholder’s request. Charge backs can occur for any number of reasons, including: customer disputes, potential or actual fraud (on the part of merchants, sales associates and/or customers), processing errors and authorization issues. Charge backs are governed by a complex set of rules and time limits that can be costly to merchants and their banks if disregarded.