---
title: "Chargeback"
url: https://carrierkyc.com/glossary/chargeback
description: "A chargeback is an amount a factor deducts from a carrier's reserve or future advances to recover an invoice that went unpaid, short-paid or disputed."
---

# Chargeback

**Definition:** A chargeback is an amount a factor deducts from a carrier's reserve or future advances to recover an invoice that went unpaid, short-paid or disputed.

Also called: Charge-back. Category: Factoring.

Chargebacks are how factors collect on recourse. Typical triggers: the debtor short-pays for a lumper fee or damage claim, refuses detention that wasn't approved, disputes the load, pays the carrier directly, or simply doesn't pay inside the recourse window. The deduction usually comes first from the [reserve](https://carrierkyc.com/glossary/reserve), then from the next funding.

A chargeback recovers money only while the client keeps factoring with you. Track the chargeback rate per client and per debtor. A rising rate on one client is often the first visible sign of trouble with its operation, its paperwork or its honesty.

> **Red flag: Red flags** Chargebacks because the debtor paid someone else. If the broker says it paid the carrier, find out why it ignored your NOA. If it paid another factor, treat it as possible [double factoring](https://carrierkyc.com/glossary/double-factoring) and run a [UCC search](https://carrierkyc.com/tools/ucc-search). Also watch for a client who asks to stop factoring right after a batch of chargebacks.

Explain chargeback terms in plain language at onboarding. Surprise chargebacks are a common reason carriers leave, and a client in a dispute is harder to collect from.

## Related

- [Buyback](https://carrierkyc.com/glossary/buyback)
- [Reserve](https://carrierkyc.com/glossary/reserve)
- [Double factoring](https://carrierkyc.com/glossary/double-factoring)
- [What non-recourse factoring doesn't cover (recourse vs non-recourse)](https://carrierkyc.com/guides/non-recourse-factoring-what-it-doesnt-cover)
- [Factoring cost & APR calculator](https://carrierkyc.com/tools/factoring-cost-calculator)