A debit card is a card that can be used to make purchases by drawing money from a checking account. Unlike a credit card, in which money is drawn from a line of credit, a debit card takes money that has already been deposited in an account. While a debit card transactions is legally binding, transactions can be reversed under certain circumstances, such as when fraud has occurred or a mistake has been made.
Checking accounts are accounts, usually held with banks, in which money is deposited. This money can then be withdrawn, either directly from the bank or through debit cards, which allow retailers to wire money from the card holder's account to another account. When a debit card transaction goes through, money is taken out of one account and placed into another account. To reverse the transaction, the money must be wired back.
Debit Card Transactions
A debit card transaction is legally binding. When a card holder pays for a purchase with a debit card, he will generally either sign a receipt authorizing the transaction or enter a personal identification number. In either case, the card holder is giving the retailer and his bank legal permission to move the money. So to reverse the transaction, it must be done with the retailer's permission and in accordance with laws and bank policies regarding the use of debit cards.
When a transaction is reversed, it, like the original transaction, must be authorized by the card holder's bank and the retailer's bank. Generally, banks will reverse a transaction only if there is sufficient cause to void the original transaction. For example, if the transaction was made fraudulently, banks will generally be willing to reverse the charges. Similarly, if mistakes were made in the transaction, the banks may reverse the transaction to correct the error.
In some cases, a transaction will not be reversed, but instead, a refund will be provided by the retailer to the card holder. For example, if the card holder wishes to return an item purchased from a retailer using a debit card, the retailer will generally not seek to have the transaction reversed. Instead, he will provide the card holder with a refund, often by transferring the same amount of money from his bank to the card holder's bank.