Merchant liability refers to the legal responsibility that businesses have for transactions conducted with their customers. This includes ensuring that products are safe, accurately described, and delivered as promised. If a customer suffers harm or loss due to a merchant's negligence, the merchant may be held liable for damages. In the context of credit card transactions, merchant liability can also involve issues like fraud or chargebacks. Merchants must comply with Payment Card Industry Data Security Standards (PCI DSS) to protect customer information. Failure to do so can result in financial penalties and loss of the ability to process credit card payments.