Merchant account chargebacks are a dreaded event for any business that accepts credit or debit cards. They are expensive, time consuming, subject to fraud and just downright annoying.
Chargebacks are not the same as refunds which are initiated on your end when, for example, a customer returns a product. Rather, chargebacks are initiated through the credit card issuer because the customer has challenged the charge or filed some kind of complaint. It amounts to a reversal of the original transaction, and the merchant gets stuck paying a chargeback fee to boot. Read the full entry