Written by Modulr | Jul 24, 2025 11:00:00 PM
A chargeback is a transaction reversal raised by the cardholder or initiated by a cardholder’s issuing bank, typically due to suspected fraud, disputes, or processing errors. Chargebacks serve as a consumer protection mechanism but can create financial and administrative burdens for merchants, as while cardholders must attempt to resolve the issue with the merchant before raising the chargeback the mechanism can be abused through Chargeback Fraud, where despite goods or services being received a chargeback is still raised and funds returned to the customer.