What is a chargeback in relation to credit card transactions?

A chargeback refers to the process where a customer disputes a transaction made on their credit card, typically because they believe that the charges are incorrect, unauthorized, or due to the non-provision of goods or services. This mechanism allows consumers to safeguard their rights regarding fraudulent transactions or unsatisfactory purchases. When a chargeback is initiated, the credit card issuer investigates the claim and can reverse the transaction, refunding the customer's account and retrieving the funds from the merchant's account if the dispute is resolved in favor of the customer.

This definition captures the essence of how chargebacks operate within the framework of consumer protection in financial transactions. It highlights the importance of ensuring that customers have recourse in case of disputes, providing a layer of accountability for merchants to offer quality service. While other options mention related concepts to credit card transactions, they do not accurately define a chargeback within the context of payment disputes.