Online Merchant

Chargeback insurance

Posted on 09. Feb, 2009 by admin in Merchant Article

Chargeback insurance refers to an insurance coverage protecting a merchant who accepts credit cards. The coverage protects the merchant against cardholder 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:

• A credit card is lost or stolen and used before the cardholder can report it
• Credit Card Number Generators or Counterfeit Plastic Cards
• Identity theft
• Post-purchase “ship to” information changes

Merchants are reimbursed for:

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

A typical chargeback insurance policy will only cover losses on credit card transactions purchased thru your specific credit card processor or payment gateway.

Source: Wikipedia