A chargeback occurs when a credit/debit card issuer charges a payment back to a merchant following a disputed transaction with the legitimate cardholder.
The chargeback process typically begins when a cardholder notices a transaction they don’t recognize on their statement and then disputes the charge with their credit card issuer.
If the issuer determines the cardholder has a legitimate claim — if the card was stolen, for example, or the product was never delivered — the issuer will refund the cardholder’s payment. The merchant is debited the payment, usually with an additional fee.