What is Chargeback?
A chargeback is when a card payment is reversed by the customer's bank after the customer disputes it, and the money is taken back from the merchant.
Updated
Meaning
English
A chargeback is when a card payment is reversed by the customer's bank after the customer disputes it, and the money is taken back from the merchant.
Roman Urdu
Chargeback tab hota hai jab gahak card payment par aitraaz kare aur us ka bank paise merchant se wapas le le.
Also called payment dispute, card dispute, payment reversal.
Example
An online store sells a 25,000 rupee watch by card. Three weeks later the cardholder says the purchase was not his. The bank reverses the payment, and the store loses both the money and the watch unless it can prove delivery.
How it works
Chargebacks protect cardholders from fraud and from sellers who do not deliver. For merchants, they arrive weeks after the sale, and the bank asks for evidence: an order confirmation, proof of delivery with signature or OTP, and communication with the customer. Without these, the merchant usually loses.
Online sellers in Pakistan face them mainly on card payments through payment gateways. Reduce the risk by using 3-D Secure (OTP) on cards, confirming large orders, shipping only to verified addresses, and keeping delivery proof for every card order.
In Nafaa
Nafaa does not process card payments itself, so chargebacks are handled with the shop's bank or payment provider; Nafaa keeps the bill, the payment method and the order history that serve as evidence.
Related terms
- Payment Gateway
A payment gateway is a service that lets a website or app accept card, wallet or bank payments online and passes the money to the seller's account.
- Refund
A refund is money paid back to a customer for a returned item or a cancelled order.
- Escrow
Escrow is when a neutral party holds a payment until both buyer and seller have done their part.