Merchant Guide to Chargeback and disputes – Innovative Merchant Services

Chargebacks occur when a customer asks their bank to return their funds paid for a purchase due to problems with the transaction. As a merchant, this is a situation you want to avoid as much as possible but one that occurs frequently in the world of credit card processing. A chargeback is like a forceful refund that a customer requests when they are unable to get their money back directly from the merchant.
Chargebacks are bad for merchants which is why it is important to learn about them and how to avoid such disputes. For every valid dispute, the merchant will have to pay a chargeback fee of $20 to $100. Being charged a higher transaction rate by your payment processor is another likely consequence of frequent chargebacks. Even worse, you stand a risk of your merchant account being shut down permanently if there are too many disputes and chargebacks.

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