How many types of chargebacks are there?

On a general level, there are three types of chargebacks: criminal fraud, which make up less than 10% of all field chargebacks; merchant error chargebacks, which encompass 20% to 40% of disputes; and friendly fraud, which account for 60% to 80% of all disputes.

What are the three sources of chargebacks?

The three sources of chargebacks are criminal fraud, merchant error, and friendly fraud.

What is the most common chargeback?

Friendly fraud is by far the most common type of chargeback. It accounts for 60% to 80% of all chargebacks filed against merchants.

How do you categorize a chargeback?

You can categorize a chargeback by examining the reason code you received from the cardholderâs issuing bank. A reason code is a two- to four-digit alphanumeric code that identifies the justification for a chargeback. The reason code, along with your understanding of the transaction that took place, can help you categorize a chargeback as due to either criminal fraud, merchant error, or friendly fraud.

What is the difference between dispute and chargeback?

The terms âdisputeâ and âchargebackâ are often used interchangeably to refer to a cardholder- or issuer-initiated challenge against a charge. On a more granular level, however, all chargebacks are disputes, but not all disputes are chargebacks. A dispute, which involves a cardholder or issuer questioning a transaction, may precede and lead to a chargeback, which is a formal process that seeks to forcibly reverse a transaction.

Author

Harlan Hutson

Harlan Hutson is the Director of Strategic Partnerships and Brands at Chargebacks911. He has spent the past 12 years focused on solving real world problems in payments and security; first as an eCommerce merchant, then as co-founder of an authentication company. In his role at Chargebacks911, he is focused on resolving chargeback problems for some of the largest companies in the world.