What is a return item chargeback?

A return item chargeback occurs when a consumer disputes a charge due to receiving a refund from a merchant for a returned item, but then also receives a charge on their account for the same item. This typically happens when the refund process is not properly handled by the merchant or there is a miscommunication between the merchant and the credit card company. The consumer may then contact their credit card company to dispute the charge, resulting in a chargeback being initiated.

Return item chargebacks can be costly for merchants as they may lose the revenue from the original sale and incur additional fees and penalties associated with the chargeback. To prevent return item chargebacks, merchants should ensure clear communication with customers regarding returns and refunds, promptly process refunds, and maintain accurate records of all transactions.