what is chargeback?

[NiceCold]

what exactly is chargeback? i assume it is something that if you sell stuff online and someone buy it with fake credit card..... once the system finds out its a fake a credit card, the seller aka the payment receiver lose the payment plus their own money from their pocket. right?

i understand correctly?



is this situation have potential of of chargeback/scam? im selling something at amazon and it disapear from list without saying it is sold. i check and it end up in "closed out of stock" while no sold. after 2 days of no idea why the ha my item just disapeared to out of stock..... amaozn told me that they got problem validating buyer payment and tell me not to ship the item untill everything is clear.

any tips? whats up? potential scammer? fake credit card user? chargeback?

 

[darkswordsman17]

I'd just wait to see what Amazon says. Right now you're not on the hook for anything, so I wouldn't be too concerned. No telling what the issue might be.

 

[EagleKeeper]

Chargeback just means that the purchased funds are not longer considered valid for your use as a seller.
The funds may have been fraudulent or the buy has had second thoughts and authorized a stop payment or has convinced TPTB that they should not have to pay and their money is to be returned.

In your case; you are being protected because there if a scent of fraud in the air - the payment may have been from a stolen account.

 

[stargazr]

No. Sounds like the customer's card had trouble getting an approval. This is Amazon's problem, they handle the merchant account part (credit card processing).

A chargeback is when you buy something with your credit card, and the merchant either doesn't ship the item or if you feel it is not the item as described, or damaged etc. You call your cc company and they reverse the charge until an investigation is completed.

In my experience with e-commerce the cc companies will usually side with the buyer in issues where the truth comes down to your word against the merchant's. A common problem is not receiving goods.

We had a customer claim he never received 3 packages and we had UPS receipts, 2 of which were signed (but they weren't shipped signature required, big mistake). First claim they denied him but he had the option to challenge it once, and he won. We lost over $1500.

 

[Dulanic]

A lot of incorrect information in here. A chargeback is processed by the issuer (aka customers bank) which is sent to the acquirer (merchants bank). It literally just flips the transaction.

The cc company actually doesn't "make the decision" either. What happens is the chargeback is sent to the acquirer and the money is given back to the customer. The acquirer then sends it to the merchant, the merchant can then accept it or reject it if they reject it they need to support their case. The acquirer then can send the chargeback back to the issuer or what they a 2nd presentment of the transaction or representing the original transaction. Once this happens either the issuer accepts it and re charges the customer or they escalate the issue to Visa/MC etc... and has them rule on it (very expensive).

Typically the banks work it out because they know how Visa/MC would rule and they don't want to eat the costs for filing it with them. It's not so much the banks side with anyone, they are just following the Visa/MC guidelines.

By the way there is no such thing as a "stop payment" on a credit card transaction. Once it has been approved it has been approved period.

 

[stargazr]

The cc company actually doesn't "make the decision" either.

Agreed, I lost sight of the fact that the issuing bank of the customer's card is the one calling the shots. There are several banks and companies involved in a merchant account, especially in e-commerce. I've been away from it for awhile.

It's just that I recall the whole process managed by the cc company (in some cases Amex, who bypass the merchant account in disputes, discount management etc), so it seemed like they were making the decision. And it was biased against the merchant IMO because we had more supporting evidence. I still have a bitter attitude about it.

 

[blinblue]

I sell stuff pretty frequently on Amazon, a few times I got the same email that you got. Basically what stargazr is right, its just an issue with the buyer's payment information. Could be any number of things, just let Amazon take care of it, they will notify you when (or if, a couple times the order never went through beyond that) the payment is complete and you should ship the item.

In the hundreds of transactions I've done selling stuff on Amazon, I've never had a single issue with a buyer.

 

[purbeast0]

i just want to know why companies can take the money instantly out of my account when i purchase something, however if i want to return it and they have to refund me, it takes days to get back into my account.

 

[oogabooga]

It's been covered, if it's a real chargeback it means the bank (either on their own or by the request of the cardholder) have requested verification of the transaction.

i just want to know why companies can take the money instantly out of my account when i purchase something, however if i want to return it and they have to refund me, it takes days to get back into my account.

When you throw a water balloon it is out of your hand instantly, travels through the air, than arrives at the end point.

When you're waiting for a water balloon to be thrown at you....

Not a perfect analogy, but it's roughly along that line. When you're getting charged you're sending the money out through the whole exchange system that banks have setup. It is only instant in that you're the sending point. When you're getting a refund, everything is going through the system and you're waiting for it to clear.

Companies don't get the money instantly either. Most merchants see a 2 business day turn around. For Example: their transactions from Monday, will get deposited into their accounts usually on Wednesday.