What happens when a customer disputes a transaction successfully?

When a customer successfully disputes a transaction, a payment is charged back. A chargeback occurs when a credit card issuer reverses a transaction due to a dispute, typically initiated by the customer who believes there was an error, fraudulent activity, or dissatisfaction with the purchase. This process protects consumers by allowing them to reclaim funds when they do not receive the expected goods or services or when they experience unauthorized transactions.

The chargeback process involves the customer requesting a refund from their bank or credit card provider, which then investigates the issue and, if the dispute is upheld, reverses the funds back to the customer’s account, effectively charging back the transaction. This action can impact the merchant's account standing and may incur fees, highlighting the importance for businesses to provide excellent customer service to resolve any issues before they escalate to disputes.