What occurs during a chargeback?

During a chargeback, a customer disputes a transaction they believe is unauthorized or erroneous. This process is initiated when the customer contacts their bank or card issuer to request a refund for the purchase they disagree with. The bank investigates the claim, and if the chargeback is processed, the amount of the disputed transaction is refunded to the customer, and the funds are reversed from the merchant's account. This mechanism serves as a consumer protection measure against fraud or unsatisfactory transactions, ensuring that customers have recourse if they feel wronged by a merchant. It is a critical aspect of the payment processing system that helps maintain trust between consumers and merchants.

The other options reflect different aspects of the payment process but do not capture the essence of what a chargeback involves.