Commerce Glossary

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What are Chargeback Fees?

charge - back fees
noun
Are a non-refundable cost issued by the merchant’s acquiring bank, that must be paid by the merchant for every chargeback they receive. The fee is meant to cover the administrative costs that are associated with the dispute process, and the price may vary for different situations; the acquiring bank is the one to determine the actual amount.

Although many payment processors have transparency in their gateway fees, there are many hidden fees including chargeback fees, refund fees, etc. Besides fees, you need to understand whether additional contracts or support resources are needed. Keep in mind that when chargebacks occur, the transaction value isn’t the only amount you lose. You’ll also need to pay extra chargeback fees, such as: • Operational costs for the resources needed to fight the dispute;
• The transaction commission, which is non-refundable even if the customer loses the dispute;
• Any chargeback fee, if applicable; this will depend on the contract you have with your current payment provider.

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