Chargeback

A chargeback starts when the cardholder disputes a charge — unauthorized, never delivered, not as described, billed twice. For credit cards, the Fair Credit Billing Act and Regulation Z give consumers billing-error rights if they notify the issuer within 60 days after the first statement showing the error, and cap liability for unauthorized use at $50. For debit cards, Regulation E sets a 60-day error window and liability tiers that grow from $50 to $500 or more the longer a lost card goes unreported. Card network rules then decide how the merchant can fight back.

For merchants the dispute has two faces. Some chargebacks are true fraud: a stolen card or a taken-over account. Others are friendly fraud — the cardholder made the purchase and disputes it anyway. Both cost the amount, the fees and, above a threshold, the merchant's standing with its processor.

Prevention works before the payment. Confirming that the buyer is who they claim to be, that the device and behavior fit that person's history, and that the account is not linked to earlier disputes cuts both kinds — and leaves the evidence needed to contest the ones that come anyway.