Chargeback
A chargeback is a forced payment reversal initiated by a player's bank, returning funds and often adding a penalty fee.
What it means
A chargeback happens when a player disputes a transaction with their card issuer rather than the operator. The bank reverses the payment, and the operator usually pays a penalty fee on top. In gambling, chargebacks are often "friendly fraud" — a player loses, then disputes the deposit.
Why it matters for operators
High chargeback ratios raise processing costs, trigger larger rolling reserves, and can get an operator dropped by acquirers or placed in costly monitoring programs. Strong KYC, clear billing descriptors, and fast support are the front-line defences. Keeping the ratio low is a survival issue, not just a cost.
Example
If chargebacks exceed roughly 1% of transactions, card networks may place the merchant in a monitoring program with steep fees and stricter terms.