How do you implement compensating transactions in microservices?

Short answer: Compensating transactions are used to undo the changes made by a service in a distributed transaction, particularly when one of the services in the transaction fails.

Real-world example (ShopNest)

ShopNest splits Catalog, Cart, Order, and Payment into services so teams can deploy catalog changes without redeploying payments.

Say this in the interview

1. Define — one clear sentence (the short answer above).
2. Example — relate it to a project like ShopNest or your real work.
3. Trade-off — when you would not use it.