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LSDefine
Simple English definitions for legal terms
charge-back
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A quick definition of charge-back:
Charge-back: When you deposit a check into your bank account, the bank gives you the money right away. But if the check bounces or is not valid, the bank takes that money back from your account. This is called a charge-back.
A more thorough explanation:
A charge-back is when a bank takes back money that it had given to a customer. This usually happens when a check that was deposited into the customer's account bounces or is not valid.
John deposited a check for $500 into his bank account. The bank credited his account with $500, but later found out that the check was not valid. The bank then took back the $500 from John's account. This is an example of a charge-back.
Another example could be if a customer disputes a charge on their credit card and the bank takes back the money from the merchant's account. This is also considered a charge-back.
These examples illustrate how a bank can take back money that it had previously given to a customer or merchant. It is important to make sure that any checks or charges are valid before depositing or accepting them to avoid charge-backs.