What is a Chargeback?

Last Updated: Apr 24, 2013 03:43PM PDT
A chargeback is a when a donor issues a complaint with their bank that a certain charge on their credit card is unauthorized. This usually occurs because donors either don't remember they donated, or don't recognize the charge on their credit card. If the chargeback goes through, a refund is issued and is followed by a $20 charge to the nonprofit. 

This is a fee that is accessed by the card issuing bank that gets passed onto the payment processor and the merchant.  It is standard in the credit card processing industry and unfortunately is unavoidable when a chargeback is filed and lost.
 
Whenever we receive notification that a chargeback is initiated, we send notification emails to the donor, fundraiser and the charity in an effort to get the donor to cancel the chargeback.  This is the only way to avoid this fee.  Whenever you receive a notification email about a chargeback, it is best practice for the nonprofit to reach out to the donor directly to get them to drop the dispute