What is a chargeback fee?

A chargeback fee is a fee imposed by banks on credit card users when a charge is reversed after a dispute has been filed. This fee is charged by the bank to cover the cost of investigating the dispute and returning the payment to the customer. This fee is often much higher than the original charge and can vary depending on the nature of the chargeback and the issuer. In New York, the chargeback fee is regulated by the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CCARDA). This act sets out the rules and regulations governing credit card use. It requires that chargeback fees be clearly disclosed and capped at $15 for most disputes. This fee is meant to protect consumers from rampant fee increases due to frequent chargebacks. Businesses may be subject to higher fees depending on the number of chargebacks they receive and other factors. Additionally, the credit card issuer may choose to impose a penalty fee for disputed chargebacks. This penalty fee is separate from the chargeback fee and may be more substantial. It is important for businesses to understand their rights and obligations when it comes to chargeback fees. Working with a knowledgeable accountant or financial advisor can help to ensure that these fees are managed properly.

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What is a chargeback fee?

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