When a customer purchases goods or services with a credit card, they are able to dispute charges by initiating a chargeback, which means that the purchase is “charged back” to the merchant. The process begins with a debit to the merchant's bank account for the amount of the dispute while the bank investigates the purchase to determine whether or not the customer is entitled to a refund. The merchant will receive a chargeback notice that will include the transaction details, reason for the chargeback, and instructions on what the merchant needs to do to prove the sale was valid. 

If the card issuing bank determines that it was a valid sale, the funds will be re-deposited to the merchant's account. Chargebacks can result from disputes that a customer has with a merchant over a particular sale, or when a customer’s card number was stolen and used to make a fraudulent purchase. The losses due to chargebacks can really hurt small merchants. If merchants experience too many chargebacks, our AngelPay Risk Department may be forced to suspend the Member's merchant account. To help avoid chargebacks, merchants should respond to customer complaints in a timely manner, review their transactions daily to look for any sales that are out of the ordinary, and ensure that they ship their products only to the cardholder’s verified billing address.