A credit card chargeback involves a customer going directly to the bank to get their money back after a merchant transaction. When a customer is dissatisfied with what they purchased from you for whatever reason, they’ll seek any path possible to get their money back. In the case of a chargeback, they’re asking for a reversal of a payment as opposed to a refund from the merchant itself.
When a customer pursues a credit card chargeback, they reach out to their bank for remediation. This action causes the bank to forcibly take the money from your account to appease the customer. For this reason, many businesses are unaware that chargebacks are occurring until after the customer has done the deed. This scenario can lead to some negative consequences.