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A chargeback is a “returned item” to the merchant. It is similar in many respects to a returned check. The chargeback rules emanate from certain Federal banking regulations which allow for a consumer to dispute his credit/debit card bill. In addition Visa and MasterCard allow for technical violations of their rules to result in a chargeback. Most chargebacks are preventable by the merchant. However merchants who are in the mail order/telephone order or internet business are more susceptible to chargebacks as the cardholder is not present at the time of the sale and there is a greater possibility that the merchandise has not been as thoroughly examined by the cardholder prior to purchase (thus resulting in disputes over quality).
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