Diagram of the chargeback process between cardholder, issuer and acquirer

A chargeback is when a cardholder asks the card-issuing bank to refund the amount of a transaction made without the cardholder's knowledge.

A chargeback is a process inherent to card transactions that cannot be prevented entirely. The risk of chargebacks can be minimized by taking simple but important precautions.

How does the chargeback process work?

To explain the process simply;

  1. The cardholder applies to the card-issuing bank (issuer) for a refund of a transaction that they claim they did not make.
  2. The issuer forwards the chargeback request to the acquirer (the merchant's bank).
  3. The acquirer asks the merchant for information and documents related to the sale.
  4. If the information and documents are not sufficient to prove the sale, the acquirer refunds the transaction amount to the cardholder's bank.
  5. The cardholder's bank transfers the payment amount to the cardholder's account.

What should cardholders pay attention to in order to reduce chargebacks?

  • First of all, make sure the site you are shopping on is secure. To determine whether a site is trustworthy for online shopping, confirm that the site has an SSL security certificate. The SSL certificate can be seen as a green or yellow padlock icon on the left side of the address that starts with https://, or at the bottom of the browser.
  • Take care to complete online shopping transactions with 3D Secure.
  • In e-commerce transactions, if additional information such as your mother's maiden name, where you got the card, or your date of birth is requested beyond the card number, security code and expiration date, consider the possibility that it is a fake site.
  • When paying through a POS during in-store shopping, make sure the transaction is always done in front of you. Copying the magnetic stripe data of credit cards is usually done this way.
  • Check whether the amount on the receipt matches the price of the items purchased. If the amounts differ, ask for the transaction to be cancelled and a new authorization to be obtained with the correct amount.
  • Keeping the receipts of your purchases until the statement is generated is important so that they can be used in case of a problem.
  • Check the expenses on your statement in every statement period. 
  • Make a point of using a virtual card for online shopping. Setting the virtual card limit to exactly the payment amount will reduce the risk even further.
  • Do not share your card number, expiration date and the three-digit security number (CVV2) on the back with third parties. Do not share this information if it is requested over the phone.
  • Stay away from websites that sell products far below market value. They are very likely to be sites that sell fake or stolen products.
  • Be very careful when shopping on websites whose domain (domain name) has been registered recently.