![]() A customer writes a check to a business, which is used to pay for a purchase. So, with that in mind, let’s take a high-level look at their functions and usage. That said, understanding what they are and how they work is still a good idea. So, if a return item chargeback isn’t a payment card chargeback, do merchants need to worry about them? For the most part, the answer is “no.” Questions about payment card chargebacks? We’ve got answers. Also, any fees are paid by consumers, not merchants.īottom line: the word “chargeback” is used to label two different processes that have little to do with each other. Here, though, the process does not revolve around credit cards. Using the word “chargeback” in the name makes it sound like a transaction dispute. You usually have no input on this decision in fact, you may not even know about it until you’re notified after the fact.ĭespite the name, a return item chargeback is not a credit card transaction dispute. At that point, the cost of the transaction is transferred directly from the merchant’s account to the cardholder’s account. The bank may initiate a chargeback if a customer disputes a payment card purchase but cannot resolve the issue by dealing directly with the merchant. Designed as a consumer protection device, chargebacks serve as a last resort for cardholders who are victims of fraud or dishonest merchants. When we use the word “chargeback,” we’re most often referring to a forced transfer of funds from a merchant to a consumer. Payment Chargeback: What’s the Difference? The difference mostly depends on whether the check was written to fulfill a debt, or if it was deposited or cashed. You're not far off if you think that sounds like a bounced check fee. Here, they define a return item chargeback fee as a charge applied “each time a check or other item that either cashed for or accepted for deposit to account, is returned to us unpaid.” Specifically, let’s examine the Other Account Fees and Services: Miscellaneous section. To illustrate this concept, let’s look at Bank of America’s Personal Account Fee Schedule.
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