{"head":{"title":"What Is a Chargeback? Definition and Example | OceanLab","description":"A chargeback is when a cardholder's bank reverses a card payment after a dispute. How the process works, what it costs merchants and mistakes.","canonical":"https://oceanlab.in/glossary/chargeback"},"crumbs":[{"name":"Home","path":"/"},{"name":"Glossary","path":"/glossary"},{"name":"chargeback","path":"/glossary/chargeback"}],"slug":"chargeback","term":"Chargeback","aka":["payment dispute","dispute"],"category":"Payments and fintech","short":"A forced reversal of a card payment, started by the cardholder's bank after the cardholder disputes the charge.","body":[["When a cardholder tells their bank a charge is wrong, for example fraud, an item not received or a cancelled subscription still billed, the bank can pull the money back from the merchant through the card network. The merchant can respond with evidence, and the bank decides."],["Each card network has its own dispute rules, reason codes and deadlines. Merchants usually pay a fee per chargeback whether they win or not, and payment providers watch chargeback rates closely."]],"why":["Chargebacks cost the sale, the fee and staff time. For marketplaces and subscription products they are a real line in unit economics. Good receipts, clear billing names, easy cancellation and delivery evidence prevent many of them and help win the rest."],"example":["A subscription app sees chargebacks from users who forgot they signed up. It adds a reminder email before each renewal and a one-click cancel. Disputes drop, and for those that remain the app can show the reminder and the usage log as evidence."],"inBuild":["In a payments or marketplace build, chargebacks need a webhook handler, a dispute status on orders, an evidence pack builder and rules for who bears the loss, such as the seller on a marketplace."],"mistakes":[["Treating disputes as rare and handling them by email."],["A billing descriptor customers do not recognise on their statement."],["Missing response deadlines, which loses disputes by default."]],"related":[{"href":"/glossary/settlement","label":"Settlement (payments)","detail":"The point when money for a payment actually moves into the receiver's account, after the payment was approved and cleared."},{"href":"/glossary/reconciliation","label":"Reconciliation","detail":"Checking that two records of the same money agree, such as your ledger and the bank or provider's statement, and explaining every difference."},{"href":"/glossary/strong-customer-authentication","label":"Strong customer authentication (SCA)","detail":"The EU rule under PSD2 that online payments and account access must be confirmed with two independent factors from different categories."},{"href":"/glossary/ledger","label":"Ledger","detail":"The record of every movement of money in a system, kept so that any balance can be explained entry by entry."}],"tools":[{"href":"/tools/payment-processing-fee-calculator","label":"Payment processing fee calculator","detail":"Free tool"}],"links":[{"href":"/build/payment-gateway","label":"Building a payment gateway","detail":"Card flows, tokens and PCI scope."},{"href":"/software/payments","label":"Software for payments","detail":"Payment systems and the compliance work they bring."}],"sources":[],"legal":false,"updatedAt":"2026-10-25"}