A process in the industry where a wholesaler requests an amount that is the difference between the manufacturer’s price to the wholesaler and the contract price to the resale customer.
The actual charge back occurs when the wholesaler sells the manufacturer’s product at contract price that is below wholesaler acquisition cost (WAC).
Especially evident in pharmaceutical industry. In electronic commerce, a charge back is a reversal of a credit card transaction, which is usually initiated by the card issuer as requested by the card holder. It may also be requested by the merchant. Charge backs usually occur due to fraudulent activity on the card (real or perceived), due to customer disputes, or from other authorization issues.