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Chargeback fee vs. refund: what's the difference?
What is the difference between a chargeback and a refund?
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3 Answers
A chargeback is usually a consumer or customer initiated recall of funds, a debit or a deduction taken but not authorized in advance by the vendor. Customers may initiate a chargeback by contacting the issuing bank or credit card company, and filing a substantiated complaint on debit items on their credit card or bank statement. A refund is usually defined as a return of funds from the vendor to the customer. As an example, if Customer orders $50 online using a debit card, but Vendor fails to ship the product, Customer may call the bank that issued the debit card and have the debit or charge removed. This is a chargeback. If the Vendor fails to ship the product after receiving payment, but issues a credit to cancel the charge, this is a refund.
Refund: the merchant initiates the payment of money to the customer and the fees are typically similar to the fees on the original charge
Chargeback: the customer initiates payment of money by calling his credit card company. The fees are usually in the $15-25 range no matter the outcome of the dispute. Additionally, the credit card companies pay particular attention to the chargeback rate and will penalize merchants whose rates are too high.
The previous answer is good answer, I would add few things:
Chargeback is the process of getting your money back as a customer by complaining against a transaction you do not think it is yours, where the merchant is required to provide evidence against your claim, or forced by the issuer to compensate you back if they failed to provide evidences.
Where a refund is the agreement between you as a customer and the merchant directly; without issuer interference to return your money for any type of agreement you made.
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