> It's a consumer being able to unilaterally say "give me my money back" and the merchant basically being stuck with the tab.
The merchant is stuck with more than the tab. There's also a chargeback fee, which can range from around $15 to several times that depending on who they use for payment processing.
> Doing a chargeback means the relationship between consumer and merchant is ineffective that they can't resolve their differences normally.
Sometimes it means that the customer didn't even try to resolve the dispute. At one place I worked we always gave a refund when one was requested, with no hassle. Some customers, though, would not ask. They would go straight to chargeback.
I think that because some companies make it a major hassle to get them to issue a refund, some consumers try to do a chargeback first and only call the merchant if the bank requires them to try to settle the issue directly first.