What are chargebacks?
In traditional finance, a chargeback is a reversal of a credit card payment: a customer pays you but then requests the money back, and the bank enforces you to comply.
This may happen for a variety of reasons: if a cardholder has been charged for an item they never received; if there was a mistaken charge by the merchant; if the consumer wanted to return the item but didn’t do that on time, and so on.
Can you chargeback Bitcoin? Are chargebacks possible in cryptocurrency?
The short answer is: no. Crypto chargebacks are not possible.
Firstly, the nature of cryptocurrency payment processing eliminates many cases where fiat chargebacks would be possible. Since the customer has to send the payment manually from their wallet, there’s no chance they’ll be charged by accident and less chance for a mistaken charge.
Secondly, transactions in cryptocurrency are technically irreversible. Once they are written in the blockchain, it’s impossible to do anything to them.
What is the alternative to chargebacks in crypto?
When a customer reports to you that there is something wrong with the item or its shipping, investigate the case. If it was your mistake, simply refund the money manually to the address that the customer provided. If the matter is questionable, you have time to think — no bank can forcibly reverse the transaction.
For more information about the funds’ flow in NOWPayments, read the following FAQ.
A customer wants a chargeback, and you don’t know what to do?
Happy to help. Contact us at [email protected], and we’ll figure out what to do.