What does a cardholder-initiated chargeback indicate?

A cardholder-initiated chargeback typically indicates that the cardholder is disputing a transaction because they did not receive the goods or services they paid for. This situation arises when the customer feels that they have been wronged or defrauded in a transaction, prompting them to request that their card issuer reverse the charge.

In the context of a chargeback, it primarily serves as a consumer protection mechanism, allowing customers to reclaim funds for transactions that were not completed as expected. While other factors, such as defective products, customer service issues, or fraud involving stolen cards, are significant and often lead to disputes, they are categorized differently in the chargeback process. Each situation has distinct definitions and implications in terms of consumer transactions and merchant responsibilities, focusing specifically on the aspects of service or goods receipt, fulfillment according to the agreement, and customer satisfaction.