The basic chargeback process

A chargeback is one of the most popular means of dispute resolution for online merchants in India. This process is usually carried out by using the “chargeback scheme”. However, like the famous case of online fraud and hackers, the process of making the chargebacks also involves an extra step.

Chargeback Process:

The first step is that the merchant makes the purchase order.

If the order is genuine, the customer places the order. The seller creates an order record and puts all the order details in the order entry box.

The customer then confirms the order details and places an order via a delivery confirmation email.

Seller then posts the order on the website and places an order ID number on the order record.

An email is then sent to the customer, requesting the order ID.

How to handle a chargeback

When a customer complains of fraud, the bank denies the charge and may issue a chargeback to the payment method. A chargeback means the bank reports that an item does not exist on the merchant’s system. The chargeback details are sent to the merchant and the merchant’s bank, which approves or denies the claim.

Here’s how the chargeback process works.

Upon receiving a claim of a non-existent product, the bank’s dispute process is activated. This causes an alert to pop up in the bank’s database and the bank asks the merchant to deny the chargeback.

If the chargeback is denied, the merchant will issue an additional chargeback, which, again, causes an alert in the merchant’s account and the bank may deny the chargeback.

What if you are not the victim?

Payments Security is all about your security as well as protecting your funds. Chargebacks are one of the biggest drivers that support the growth of online payments as customers are losing confidence in the security and safety of the payments, and an equal number of businesses and merchants are also losing trust and confidence in the payments. In such an environment, companies are forced to change their old payment practices and move towards a new one.

A chargeback could be given to a merchant after a customer complains about an unsatisfactory service, a product that does not match their expectations or lack of payment. A chargeback protects both the merchant and the customer by protecting the rights of both parties in the dispute.

Steps to take when you think your card is compromised

Notify your bank immediately: Credit and debit card fraud can affect many users and notifying your bank right away is the best way to get it solved. In most cases, card networks such as MasterCard, Visa and American Express will act on a fraud like this within 24 hours.

If you’re staying at a hotel, ensure the hotel signs your credit card and notifies you of any activity from your card. Another thing you can do is to log into your online banking and see if there is any activity from your card. If you don’t see any transactions, this is an indication that there is no fraud on your card.

Check your card statement: After you are informed by your bank of a possible credit or debit card issue, carefully review your online or print statement to see if there are any suspicious charges.


Chargeback fraud is a sophisticated form of fraud that is used by scammers to get their way by enticing unsuspecting users into performing fraudulent transactions. Do not get scammed. Be vigilant and beware of scam emails and any statements that appear to be too good to be true.