If you accept credit cards on your store, then it's likely you need to deal with chargebacks or inquiries. When a cardholder has an issue with a charge on their credit card, they can contact their bank to dispute the charge. The bank then makes a chargeback or inquiry. The cardholder can be one of your customers or someone who believes that their card was used on your store without their permission.
If the cardholder's bank makes a chargeback, then the bank takes the disputed amount from you right away. The cardholder's bank also takes a chargeback fee from you. If the cardholder's bank makes an inquiry, then they don't take the disputed amount or a fee right away.
You can try to resolve the chargeback or inquiry in a few ways. Often, the company that issued the cardholder's credit card reviews any evidence and then resolves the chargeback in either your favor or the cardholder's favor. If you win the chargeback, then you get the disputed amount back, and Pisell refunds the chargeback fee. If the cardholder wins the chargeback, then the disputed amount is returned to the cardholder.
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Chargeback process
This is the typical process for a chargeback:
The cardholder disputes a credit card charge with their bank.
The cardholder's bank sends a chargeback request to the credit card company, and takes the disputed amount and a chargeback fee from you.
The credit card company asks you for evidence that the charge was valid.
You gather evidence to figure out whether the charge was valid and add it to the chargeback response.
After you complete your chargeback response, you forward it to the credit card company by clicking Submit response.
The credit card company reviews the evidence. The review can take up to 75 days after the response is submitted.
The credit card company resolves the chargeback.
If you win the chargeback, then the cardholder's bank returns the disputed amount to you, and Pisell refunds you the chargeback fee. If the chargeback is a partial win, then the cardholder's bank returns some of the disputed amount to you, and Pisell still refunds you the chargeback fee. If the cardholder wins the chargeback, then the disputed amount and the fee isn't returned to you.
Caution
Pisell is not liable for chargebacks occurred when using our platform. Pisell is not involved in the decision making of chargeback outcomes.
Chargeback fee
When a bank sends you a chargeback, they also charge you a processing fee. If the chargeback is resolved in your favor, then Pisell refunds this fee. The following list provides a breakdown of the processing fee by country or region:
- 25 AUD in Australia
- 15 CAD in Canada
- 15 EUR in Austria, Denmark, Germany, Italy, the Netherlands, Belgium, and Spain
- 15 EUR + 23% VAT in Ireland
- 85 HKD in Hong Kong SAR
- 1,300 JPY in Japan
- 20 NZD in New Zealand
- 15 SGD in Singapore
- 15 EUR or 150 SEK in Sweden, based on payout currency
- 10 GBP in the United Kingdom
- 15 USD in the United States
Resolve a chargeback or inquiry
You can help to resolve a chargeback or inquiry in the following ways:
Contact the customer
You can talk to the customer who made the order by phone or email to see if you can resolve the issue. If the customer agrees that the chargeback isn't necessary, then the customer must contact their bank and ask them to drop the chargeback. You should also submit evidence that shows that the customer agreed to drop the chargeback.
Add additional evidence
After the cardholder's bank makes a chargeback or inquiry, you have a limited time to submit evidence that the charge was valid. The amount of time that you have to submit evidence depends on the credit card company and the reason for the chargeback. Check with the credit card company to find out the chargeback time limit.
The type of evidence that you should submit depends on the reason that the cardholder asked for a chargeback or inquiry. Keep your evidence relevant and to the point. Consider including proof of customer authorization, service provided, or item delivery. You can also add your terms of service and refund policy. If you are adding any document or images, then make sure you have formatted them clearly so that they can be viewed without zooming or cropping.
If you use Pisell Payments, then Pisell tools automatically populate available data, which is used to automatically send a response to the credit card company for you on the due date. You can add additional evidence to the response before the due date. The due date is 7 to 21 days after the chargeback or inquiry is filed.
If you're using a third-party payment provider, then you should contact your provider to find out how to send evidence to the credit card company.
Accept the chargeback or inquiry
Accept a chargeback
If you think that a chargeback is justified, then you can accept it by not submitting any evidence. The disputed amount is returned to the customer, and you aren't refunded for the chargeback fee.
Issue a refund to end an inquiry
If you think that the reason behind an inquiry is justified, then you can issue a full refund for the order to end the inquiry. If you issue a partial refund, then a full chargeback can still occur. If you issue a full refund, then the cardholder won’t be able to initiate a chargeback
Reasons for a chargeback or inquiry
The type of evidence you should send to the credit card company to resolve a chargeback or inquiry depends on the reason that the customer gave for the chargeback or inquiry. A customer might dispute a charge for one of the following reasons:
- Fraudulent
- Unrecognized
- Duplicate
- Subscription canceled
- Product not received
- Product unacceptable
- Credit not processed
- General
Fraudulent
The chargeback is marked as
Fraudulent if the cardholder didn’t authorize the charge. This is the most common reason for a chargeback and can happen if the card was stolen.
To deal with a fraudulent charge, you can try to contact the customer who placed the order. The customer might have forgotten about the purchase, or the purchase might have been made by a spouse, friend, or family member. If the customer agrees that the charge was justified, then you should tell them to contact their bank and say that they want to drop the chargeback. You should still submit evidence to the credit card company, including the statement where the customer said they would drop the charge.
If you think that the customer is mistaken or not telling the truth, then you should submit the following evidence to the credit card company:
- The date and time that the order was fulfilled
- The billing information that the customer used
- The IP address and country used for the order
- Shipping and tracking information for the order.
If you want to examine all of your orders before they are fulfilled, then you can capture payments manually. Capturing an order's payment manually enables you to view the full fraud analysis for an order before you make the decision to fulfill the order and accept the payment. By reviewing high-risk orders, you can avoid potential chargebacks. Fulfilling high risk orders can result in a higher number of chargebacks. If you receive a high number of chargebacks then payment processing will be disabled and you might be removed from Pisell Payments.
Credit card companies can reverse funds for stolen cards after orders are fulfilled. Pisell helps you to gather evidence for any disputed charges. However, the decision to reverse funds is made by the bank that issued the credit card, not by Pisell. Pisell does not cover charge reversals from banks.
Unrecognized
The chargeback is marked as
Unrecognized if the customer doesn’t recognize the merchant name or location on their credit card statement.
To deal with an unrecognized charge, you should try to contact the customer. Sometimes the customer might have forgotten about the purchase, or the purchase might have been made by a spouse, friend, or family member. If the customer agrees that the charge was justified, then you should tell them to contact their bank and say that they want to drop the chargeback.
You should still submit evidence to the credit card company, including the statement where the customer said they would drop the charge. You could include some of the following pieces of evidence:
- The date and time that you fulfilled the order
- The billing information that the customer used
- The IP address and country used for the order
- Shipping and tracking information for the order.
Duplicate
The chargeback is marked as
Duplicate if the customer believes that you charged them twice for the same product or service.
If you didn't charge your customer twice, then you should try to get in touch with them. You can show them that the two charges were for separate products or services. If the customer agrees that the charge was justified, then you should tell them to contact their bank and say that they want to drop the chargeback.
If the customer does not drop the chargeback or inquiry after you talk to them, then you need to submit evidence that the two charges were for separate products or services. You could include some of the following pieces of evidence:
- An explanation of the reason for the two charges
- Receipts that shows that the two charges were for different products or services
- Any communication with the customer where you let them know about the two charges.
If you did charge your customer twice for the same product or service, then you have to accept the chargeback.
Subscription canceled
The chargeback is marked as
Subscription canceled if the customer believes that you charged them for a subscription after it should have been canceled. It can also mean that the customer expected a reminder before each recurring charge but didn’t receive one.
To resolve the chargeback, you should get in touch with your customer. It's possible that you can explain the misunderstanding, or come to an agreement with the customer. If you come to an agreement, then you should tell the customer to contact their bank and say that they want to drop the chargeback. You should also send evidence of this conversation to the credit card company.
If you think the that customer didn't cancel the subscription before the charge, then you should submit evidence to the credit card company that proves that the customer canceled their subscription after the last charge. You could include some of the following pieces of evidence:
- Your subscription cancellation policy
- Any emails or notifications sent to the customer about their cancellation
- An explanation of when and where the customer was shown the cancellation policy
- If the product or service was digital, an activity log that shows that the customer accessed the product or service after the date when they said they canceled their subscription.
If you did charge your customer after they canceled their subscription, then you have to accept the chargeback.
Product not received
The chargeback is marked as
Product not received if the customer believes that they did not receive the goods or services they purchased.
You should try to get in touch with the customer first to figure out the problem. If you can resolve the problem with your customer, then you should tell the customer to contact their bank and say that they want to drop the chargeback. You should also include evidence that the customer agreed to drop the chargeback in the response you send to the credit card company.
If you can't resolve the issue with your customer, then you should submit evidence to the credit card company that proves that the customer received the product or service before the chargeback was made. You could include some of the following pieces of evidence:
- The date and time that you fulfilled the order
- The billing information that the customer used
- Shipping and tracking information for the order
- If the product or service was digital, an activity log that shows that the customer accessed the product or service.
Product unacceptable
The chargeback is marked as
Product unacceptable if the customer feels that the product was received but was defective, damaged, or not as described.
Start by trying to get in touch with the customer. If you can resolve the problem with the customer, then you should tell the customer to contact their bank and say that they want to drop the chargeback. You should also send evidence to the credit card company that the customer agreed to drop the charge. If the customer didn't try to return the product or cancel the service before the chargeback was made, or if you provided the customer with a replacement product or service, send evidence of that as well.
Whether you resolve the issue with the customer or not, you should still send any relevant evidence to the credit card company. You could include some of the following pieces of evidence:
- The date and time that you fulfilled the order
- The billing information that the customer used
- Shipping and tracking information for the order
- Descriptions or pictures of the products from your store that prove that they were as described.
Credit not processed
The chargeback is marked as
Credit not processed if the customer informed you that the purchased product was returned or that the transaction with you was canceled, but you have not yet refunded or credited the customer.
Start by trying to get in touch with the customer. You can't issue a refund after a chargeback has been made, but you might be able to explain the situation or figure out another way to solve the problem. If the customer asked for an inquiry, then you can issue a refund. If you can resolve the problem with the customer, then you should tell the customer to contact their bank and say that they want to drop the chargeback or inquiry. You should also send evidence to the credit card company that the customer agreed to drop the chargeback.
If you can't resolve the issue, and you think that the chargeback is not valid, then you should send evidence to the credit card company that you either gave the customer a refund before the chargeback or inquiry was made, or that the customer was not entitled to a refund. You could include some of the following pieces of evidence:
- Your refund and return policies
- An explanation of when and where the customer was shown the refund policy
- Any emails or notifications you sent to the customer about the refund
- An explanation of why the customer was not entitled to a refund.
General
A chargeback is marked as
General if it doesn't fit into one of the other categories.
To resolve a general chargeback, you should start by trying to contact the customer so you can figure out what the problem is. If you can solve the problem for the customer, then you should tell the customer to contact their bank and say that they want to drop the chargeback. You should also send evidence to the credit card company that the customer agreed to drop the charge.
If the customer doesn't want to drop the chargeback, then you should send evidence to the credit card company that the charge was valid. You could include some of the following pieces of evidence:
- Details about the products that were ordered
- The date and time that the order was fulfilled
- The customer's billing information
- The customer's IP address and country
- Emails or other communication you had with the customer
- USPS/FedEx/UPS or other online tracking or shipping confirmations
- Proof of prior refunds or replacement shipments.
Preventing chargebacks and inquiries
When you let your customers use credit cards on your store, there is a chance of getting chargebacks or inquiries. Still, you can follow some general steps to prevent chargebacks and inquiries:
- Investigate suspicious orders before you fulfill them.
- Make sure your contact information is easy to find on your store.
- Respond to customers quickly if they have any problems.
- Inform customers about your store's policies.
- Keep your customers updated throughout the shipping process. Use online tracking and delivery confirmation if you can.
Different types of chargebacks and inquiries can also be prevented in specific ways:
| Reason for the chargeback or inquiry | What it means | How to prevent it |
| Fraudulent | The customer didn’t authorize the charge. This is the most common reason for a chargeback and can happen if the card was lost or stolen. | Make sure your billing statement text is easily recognizable to your customers. You should use your store's name or domain name, so that the customer can recognize it on their credit card bill. If you're using Pisell Payments, then you can set the billing statement text from the Pisell admin.Send receipts upon payment to remind your customers what they paid for.If you ship physical goods to the United States, the United Kingdom, or Canada, then consider only shipping products to orders that pass an AVS check. You could also contact the customer before shipping to an address that doesn’t pass an AVS check. |
| Unrecognized | The customer doesn’t recognize the merchant name or location on the card statement. Respond to this in the same way that you would to a fraudulent code. | Make sure to set the billing statement that appears on your customer's credit card bill. You should set it to your store's name or domain so the customer can remember what the purchase was for. If you're using Pisell Payments, then you can set the billing statement text from the Pisell admin. |
| Duplicate | You charged twice for the same product. | If a double charge happens accidentally, then refund the second charge right away and contact your customer to let them know what happened. |
| Subscription canceled | According to the customer, you charged for a subscription after it should have been canceled. It can also mean that the customer expected a reminder before each recurring charge but didn’t receive one. | Cancel your customer's subscriptions right away when they ask, and provide them with a confirmation of the cancellation.Make it clear on your sign-up page that your customers are agreeing to a recurring charge, and that you send them a reminder before each charge.Add a subscription cancellation policy on your store. |
| Product not received | The customer did not receive the goods or services purchased. | Ship products as soon as possible after you collect payment for an order.Estimate shipping and delivery dates as accurately as you can, or provide your customer with tracking information from the shipping company.If shipping is delayed, then contact your customer and let them know what's happening with their order. |
| Product unacceptable | The product was received but was defective, damaged, or not as described. | Make sure the pictures and descriptions of your products or services are clear and accurate.If you’re shipping physical goods, then make sure that you pack and ship your products in a way that protects them from being damaged in transit.Respond quickly to your customers and replace defective or damaged products. |
| Credit not processed | The customer informed you that the purchased product was returned or that the transaction with you was canceled, but you have not yet refunded or credited the customer. | Have a clear return policy, and make it easy to find on your store.Make sure you give refunds as soon as possible. |
| General | This type of chargeback, unlike the majority of chargebacks, doesn’t fall under one of the specific categories described. | The suggestions given for the other chargeback reasons can still be helpful. |