What is a chargeback?

A chargeback is a consumer protection measure that allows customers to dispute and reverse a credit card charge if they feel they have been victims of fraud or were charged an incorrect amount. This process is a formal dispute and must be filed with the credit card issuer in order to be valid. A chargeback can be requested when a customer feels a merchant has not provided the service or product they agreed upon, has charged too much, or has not provided refunds or credits as promised. When a chargeback is filed, the cardholder can expect temporary credits while the dispute is processed. The card issuer then contacts the merchant to investigate the chargeback and review the evidence. The merchant is then given a chance to respond to the dispute with evidence to prove the transaction was valid. Based on the evidence, the card issuer will determine whether the transaction should be refunded and the cardholder gets their money back in the form of a credit. In Delaware, chargeback laws are covered under the Delaware Consumer Fraud Act which spells out the rights and responsibilities of both merchants and consumers. The Act states that merchants must clearly disclose their charges and fees as well as any refund or credits offered. Consumers must also provide adequate evidence that proves fraud or an incorrect charge in order to be successful in their chargeback request.

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