Chargeback / Chargeback Fraud
Chargebacks are a type of buyer protection. They occur when a payment card user successfully disputes that an item on their account statement or transaction history is not valid. Chargebacks can occur on debit cards or credit cards only.
Someone may dispute a claim for a variety of reasons. They may have been charged for something they never received, a charge could have been duplicated by mistake, or the card holder’s information may have been compromised (stolen, used without authorization, etc.).
Most card issuers have a chargeback window on any transaction where they can make a dispute before they clear.
Chargeback fraud occurs when a payment card user knowingly files a chargeback for a purchase they intended to make.
For example, Alice buys a T-shirt from Bob’s shop with her credit card. Upon payment, Bob ships the shirt to Alice. When Alice gets the shirt, she calls her credit card company, saying that she never got the shipment and that she wants to dispute a charge for a chargeback. If the card issuer refunds Alice on her statement, leaving Bob without payment nor goods, then Alice commits chargeback Fraud.
Bitcoin eliminates chargeback fraud because all payments are final and settle instantly. There is no chargeback window with Bitcoin payments.