Chargeback

A chargeback occurs when a cardholder disputes a transaction, prompting the issuing bank to reverse the payment and return the funds. It acts as a consumer protection mechanism in card-based payment systems, ensuring buyers can recover money lost to errors, fraud, or dissatisfaction with services.

When a chargeback is filed, the affected business must supply proof of service delivery, such as booking confirmations or signed invoices, to contest the reversal. Merchants typically have about 20 to 45 days to respond to a chargeback, depending on the card network.

In the travel industry, where around 9 out of 1000 transactions are disputed, chargebacks are common for bookings made through online platforms when customers claim that a flight, hotel, or tour wasn’t delivered as expected.

Excessive chargebacks can harm a company’s relationship with payment processors and increase transaction fees. To reduce risks, travel businesses use fraud prevention tools, transparent refund policies, and clear communication during the booking process.