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Chargebacks are used to reverse finance charges for unacceptable or fraudulent transactions. They can be caused by misunderstandings or unethical practices, and can occur in both online and brick-and-mortar retail. Chargebacks can also prevent consumers from paying for goods they did not purchase, and can be initiated by government agencies or businesses.
Chargebacks are often used to reverse finance charges related to unacceptable or fraudulent transactions. When buyers purchase goods or services with a credit card and the seller fails to comply with the terms described, consumers can issue chargebacks through their credit card companies. The amount paid will then be “re-credited” to the seller’s account. There are often additional fees charged when chargebacks occur. These fees can be used to pay for the processing of such complaints.
Chargebacks can be caused by a misunderstanding, but they’re also often the result of bait-and-switch tactics or other unethical practices employed by sellers selling stealth products. Sellers using auction sites seem to have their share of chargebacks. This is usually due to the item not being of the same quality as described, being broken or destroyed in transit, or never received. Chargebacks also happen, in some cases, because buyers simply change their mind.
Brick and mortar retailers also experience a number of chargebacks. The consumer can file a claim for a charge on his credit card within thirty days of the purchase. This option gives consumers a way to react when low-quality products are sold by stores with questionable return or refund policies.
In the event of identity theft or credit card theft, chargebacks can prevent the consumer from paying for goods they did not purchase. If the credit card company isn’t willing to absorb the charges, perhaps because the seller hasn’t verified the credit card, the seller may be liable for the cost.
There are different types of chargebacks related to government agencies or business-to-business practices. If a state or federal government assumes the cost of a program that is the responsibility of another agency, the government can initiate chargebacks for future funding. With businesses, one company can embezzle money owed to another due to defective goods or services or because work has not been completed by a certain deadline.
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