A fee charged to a vendor by a retailer for one or more of the following reasons: late shipment, improper shipping method, mislabeled merchandise, advertising fee, incomplete order, poor quality, and/or returned merchandise by customers. Manufacturers (vendors) are "charged back" for these infractions—which have in themselves become a lucrative money-making proposition for many retailers. For instance, vendors can be penalized thousands of dollars for mislabeling shipping cartons; retailers claim the misla-belings cost them time and money, which affects their profit margin. Saks Fifth Avenue's 33-page manual lists compliance requirements ranging from acceptable types of hangers and labels to mandatory use of electronic data interchange (EDI) mapping specifications on shipping cartons. Other retailers, such as J. C. Penney's and Federated Department Stores, Inc., also have stringent regulations. Vendors are charged for markdown merchandise, product that does not sell fast enough, and for merchandise that is returned by customers due to poor fit or quality. In 2005, a class action suit was filed against Saks for improper chargebacks; the decision is pending. The Vendors Coalition for Equitable Retailer Practices (VCERP) was formed in 2005 to establish what is fair and unfair and to help monitor abuses regarding chargebacks.

Historical Dictionary of the Fashion Industry. .

Look at other dictionaries:

  • Chargeback — A chargeback is the return of funds to a consumer, forcibly initiated by the consumer s issuing bank. Specifically, it is the reversal of a prior outbound transfer of funds from a consumer s bank account, line of credit, or credit card.… …   Wikipedia

  • chargeback — /chahrj bak /, n. Banking. a debit to a depositor s account for an item that has been previously credited, as for a returned bad check. [CHARGE + BACK2] * * * …   Universalium

  • chargeback — noun A reversal of an accounting entry, especially of a disputed credit card transaction …   Wiktionary

  • Chargeback — The charge a credit card merchant pays to a customer after the customer successfully disputes an item on his or her credit card statement. Customers dispute charges to their credit card usually when goods or services are not delivered within the… …   Investment dictionary

  • Chargeback —   An ISO term. An issuer generated reversal of all or a portion of an amount previously posted to a cardholder account …   International financial encyclopaedia

  • chargeback — /chahrj bak /, n. Banking. a debit to a depositor s account for an item that has been previously credited, as for a returned bad check. [CHARGE + BACK2] …   Useful english dictionary

  • Chargeback insurance — refers to insurance coverage protects merchants who accepts credit cards. The coverage protects the merchant against fraud in a transaction where the use of the credit card was unauthorized, and covers claims arising out of the merchant’s… …   Wikipedia

  • Merchant account — A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of credit… …   Wikipedia

  • Overdraft — I warn you, Sir! The discourtesy of this bank is beyond all limits. One word more and I I withdraw my overdraft! Cartoon from Punch Magazine Vol. 152, June 27, 1917 An overdraft occurs when money is withdrawn from a bank account and the… …   Wikipedia

  • Credit card — Personal finance Credit and debt Pawnbroker Student loan Employment contract Salary Wage Empl …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.