While chargebacks and refunds are both methods of returning payment from a merchant to a cardholder, they are not the same. A refund is a voluntary return of payment, usually negotiated directly between the merchant and consumer, with no consequences for the merchant other than the lost revenue and potentially lost product. Chargebacks are the result of a much more complex process that involves multiple banks, processing costs, and fees. The consequences for merchants can be much more significant, as well.
Frequently Asked Questions
A merchant identification number (MID) is a unique alphanumeric identifier that is assigned to a merchant account. It is used to identify the account at the various stages of processing a transaction.
The MATCH List stands for Member Alert To Control High-risk merchants. It is a form of merchant processing blacklist. It lists merchants who have had merchant accounts terminated by their acquiring banks.
Debit card chargebacks are not substantially different from credit card chargebacks. The proper response depends on the circumstances of the chargeback. If the merchant determines that it is erroneous or illegitimate and has evidence that can prove such a claim, it would behoove them to pursue representment. Otherwise, it would likely be best to accept the chargeback and try to prevent future chargebacks.
Chargeback protection comes largely in the form of preventative measures. Some of this can be as the result of simple tools like chargeback alerts or more complex tools like Rapid Dispute Resolution (RDR) or Order Insight. But these tools are only effective if the merchant can integrate them into a chargeback prevention plan. Ultimately, it is incumbent upon merchants to protect themselves from chargebacks.
The bank identification number (BIN) is the first four to six digits on a payment card. They identify the bank or financial institution that issued the card, the issuer's location, and the type of card.