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Payments & chargebacksAffiliate glossary

What is Chargeback?

Unlike a refund, which the merchant gives voluntarily, a chargeback goes through the bank. The customer contacts their card issuer, says the payment was unauthorised, the product never arrived or it was not as described, and the issuer pulls the money back from the merchant.

Typical causes are fraud with stolen cards, unclear subscription billing, forgotten free trials and the customer not recognising the merchant name on the statement (“friendly fraud”). The merchant also pays a chargeback fee, and too many chargebacks can put the account into card-network monitoring programs or get it closed.

Why affiliates care: when a sale is charged back, the commission is reversed too. That is the main reason programs use a hold period, and why aggressive or misleading promotion of trial and subscription offers hurts both you and the merchant.

Related terms

Chargeback dispute
A chargeback dispute is the process in which a merchant challenges a chargeback by sending evidence to the bank that the payment was valid.
Chargeback fee
A chargeback fee is the charge a payment processor or bank bills the merchant for handling each chargeback, on top of the reversed payment.
Hold period
The hold period is the time a merchant keeps a conversion pending before approving it, to filter out refunds, chargebacks and fraud.
Payment processor
A payment processor is the company that handles card and other online payments for a merchant, moving money between the customer’s bank and the merchant’s account.