Neha Patil (Editor)

Chargeback insurance

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Chargeback insurance is an insurance product that protects a merchant who accepts credit cards. The insurance protects the merchant against fraud in a transaction where the use of the credit card was unauthorized, and covers claims arising out of the merchant’s liability to the service bank.

This coverage can apply under a number of circumstances, including:

  • The illicit use of a lost or stolen credit card before the loss or theft is reported by the cardholder.
  • The use of credit card number generators or counterfeit plastic cards
  • Post-purchase changes to "ship to" information
  • Signature mismatch or signature not on file.

    • A merchant claiming under a chargeback insurance policy may be reimbursed for:

  • The cost of a stolen product or service
  • The loss of profit

    • A typical chargeback insurance policy will only cover losses on credit card transactions purchased through its own specific payment processor or payment gateway.

    References

    Chargeback insurance Wikipedia
    (Text) CC BY-SA


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