What is a chargeback?

A chargeback is a dispute that a cardholder files with their bank. Basically it means that they do not recognize the charge as being valid and they want it taken off of their card.

What does this mean for you?
When you receive a chargeback it means that you need to provide evidence to your processor that the charge is valid. Evidence includes a signed receipt or contract. Proof that the card was present is also a good thing to have. This can generally only be proven if the card was swiped though. If you speak with your processor, then they should be able to verify and provide proof that the card was present.

What does it mean if you lose in a chargeback dispute?
If you lose you are typically assessed a fee of about $15.00 - $25.00 and if you get too many chargebacks then you can lose the privilege of accepting credit cards. This is especially bad because you can end up on a blacklist that processors check when you try to sign up. You can literally be blacklisted from ever accepting credit cards again (this tends to only occur if you are willfully participating in fraud.).

What does it mean if you win in a chargeback dispute?
You don't have to pay the fee and your record stays pristine! It doesn't sound like much of a reward, but unfortunately that's all that happens.