What is a chargeback fee?

A chargeback fee is a fee charged by a credit card company to cover the cost associated with a customer’s chargeback. A chargeback occurs when a cardholder disputes a credit card charge and requests their money back. The credit card company reverses the charge on the cardholder’s account and recoups the cost from the vendor or merchant. The chargeback fee is typically a percentage of the disputed amount, and the amount varies depending on the credit card company and the state. In Delaware, the chargeback fee can range from $5.00 to $25.00 or more. Most credit card companies will also charge a percentage-based fee of the disputed charge for a chargeback. This percentage-based fee can range between 1-8% of the amount in question. The chargeback fee is designed to protect credit card companies from fraudulent activity, and to cover the cost of investigating and resolving disputes. Generally, chargeback fees are the responsibility of the merchant or vendor, however, in certain cases the cardholder may also be held liable for the chargeback fee. Consumers should review their credit card agreement to determine if they may be held responsible for the chargeback fee. Additionally, merchants should review their credit card processing agreements to be aware of any chargeback fee policies prior to engaging in credit card transactions.

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What is a chargeback fee?

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