In other words, there are two possible outcomes to a dispute:

1. Merchant loses. Merchant refunds in full that amount of the charge plus $15-30 for the charge back processing fee.

2. Merchant wins. Merchants gets to keep the amount of the charge, but still must pay the $15-30 charge back processing fee.

From the merchant point of view, the credit card system is very annoying in that regard. If anything happens that requires that someone gets screwed, that someone will be the merchant.

The banks will not allow themselves to be screwed, because they run the system.

The credit card holder is a direct client of the banks, and the banks protect them to keep them happy.

The merchant account provider, which is where the credit card companies actually send the money for the merchant's sales, and is the entity that the credit card companies turn directly to in the case of chargebacks or fraud, protects itself by holding back part of the money it owes the merchant. The merchant account provider ends up holding a buffer of sometimes tens of thousands of dollars of the merchant's sales.

Worse, the merchant does not appear to be able to really know when payment from a credit card is actually final. According to nearly everything I can find on the net and in credit card company documentation, the limit on how old a charge can be charged back is 6 months or 1 year.

I know that is wrong because at a company whose payment handling software I maintain, we got a charge back on a transaction that was several months past a year old.

Another thing I saw that I would have thought impossible had I not actually saw it, was we had a customer who bought a subscription to a monthly service. The initial purchase went through fine (transaction comes back approved, and a day or two later shows up as settled and paid). The renewal next month went through, and so on, for the next six months or so.

Then we got a notice that the last several of these had not actually went through. The issuing bank had told the credit card processor that the transaction was approved, but we were told it was really declined, and no money was actually transferred.