A chargeback occurs when a customer disputes a charge with their credit card company, resulting in the reversal of the transaction. Affiliates lose commissions on chargeback transactions, and merchants may face additional fees and administrative overhead.
High chargeback rates can indicate fraudulent activity, customer dissatisfaction, or misleading marketing practices. Both affiliates and merchants aim to minimize chargebacks through honest marketing, quality products, excellent customer service, and clear refund policies.
Chargeback prevention strategies include fraud detection, customer verification, clear product descriptions, responsive customer support, and proactive communication about billing and subscription terms. Some affiliate programs have chargeback protection policies for affiliates.