What is a chargeback?
When a customer files a chargeback with their credit card issuer, it means they are disputing the charge and asking for a refund.
Chargeback Process
When a chargeback is submitted, Merchant Services receives a report. This information is logged into our records and an email is sent to the chargeback contact within the department notifying them of chargeback information. Departments will have a specific amount of time to submit a case against the chargeback.
Common Chargeback Reasons May Include:
- Cardholder does not recognize the charge
- Cardholder did not authorize the charge (may be fraudulent)
- Product/service or refund was never received
- Cardholder was charged incorrectly (e.g., duplicate charge or incorrect amount)
Retrieval Request vs. Chargeback Notification
If a cardholder questions a charge on their statement, they may reach out to their bank asking for documentation of the original transaction. This creates a retrieval request to the acquirer, who then sends the request to the merchant. When a retrieval request is received, the merchant should gather and submit the transaction documentation to minimize the potential chargeback. Documentation may include:
- A detailed transaction sales receipt
- An invoice of goods or services
- Proof of delivery of goods or services
When a cardholder files a chargeback, a debit to return the funds is issued to OSU’s bank account for the chargeback amount and a report is sent to Merchant Services. The information within the report is logged into our records and an email is sent to the merchant’s chargeback contact notifying them of the chargeback information. The debit is held with the card issuer until the outcome of the merchant’s or cardholder’s response to the chargeback has been determined.
Chargeback Actions
Accept Chargeback
If the chargeback is valid, and the cardholder is entitled to the credit, the merchant will need to respond to the chargeback by accepting it within the designated time frame provided in the notification.
Dispute Chargeback
If the original transaction is valid, the merchant can dispute the chargeback within the designated time frame by submitting a response to substantiate the charge along with the appropriate documentation, such as:
- Original detailed transaction sales receipt
- Invoice
- Proof of delivery of goods or services to the address
- A copy of the refund policy
- Indication of purchase via in-person, telephone, or ecommerce transaction
- Proof of refund issued to the card
- Name and address match (AVS) for ecommerce transactions
Dependent upon the ruling, the funds will be released back to the merchant or the cardholder.
No Action
If the merchant fails to respond to a chargeback by the allotted due date, then the ruling will go to the cardholder’s favor and the held funds will be released to the cardholder.