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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 through its own specific credit card processor or payment gateway.
See also
External links
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