Chargebacks

What is a Chargeback?
How do Chargebacks work?
How do I receive notification of a Chargeback?
When should I dispute a chargeback?
How do you deal with Chargebacks?
Information request.
Reasons for Chargebacks and providing evidence.
Submitted Chargeback disputes.
Result of the chargeback

What is a Chargeback?

A chargeback is a reversal of a payment requested by the consumer from the credit card company. This can happen for various reasons, such as fraud, dissatisfaction with the product or service, or administrative errors. Most chargebacks can be filed up to 120 days after the transaction, but in some cases this period can be longer.

When a chargeback is filed, the burden of proof lies with you as the merchant. The transaction amount is temporarily withheld from your account balance. If you succeed in convincing the credit card company that the chargeback is unjustified, the amount is refunded. If you do not succeed, the chargeback stands and the reversal costs are charged to you.

To limit chargebacks as much as possible, we advise the following:

1. Clear Terms and Conditions
   Make sure your Terms and Conditions are clearly visible and contain important information such as: shipping policy, exchange and refund policy, cancellation policy and the company's contact details.
2. Open communication in case of problems
   Inform customers immediately about delays or stock issues.
3. Fast customer service
   Respond quickly to complaints or issues with delivered products or services.

 

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Which payments can be disputed?

A chargeback is a reversal of a payment requested by the cardholder from the bank or card issuer. This occurs when a consumer disagrees with a debit, for example, because a product has not been delivered or a service has not been performed. Chargebacks are an important part of the protection that card payments offer to consumers.

All major card networks , including Visa and Mastercard , have chargeback procedures. This means that payments made with these cards can, in principle, be reversed, provided the conditions of the relevant card network are met. The exact rules and time limits vary by card network, but the basic principle is the same everywhere: the cardholder has the right to dispute a payment in the event of a valid dispute.

Chargebacks are not limited to online purchases. Payments made in physical stores can also be chargebacked. This applies, for example, when a consumer makes a down payment in a store for a product that is not delivered later. If the retailer is unable or unwilling to deliver the product and does not voluntarily refund the down payment, the cardholder can initiate a chargeback through their bank.

It is therefore important for entrepreneurs to make clear agreements regarding deliveries, down payments, and refunds, and to document these properly. This reduces the likelihood of chargebacks and the associated costs and administrative burdens. For consumers, chargebacks offer an additional safety net when they have paid by card and a purchase does not proceed as agreed.

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How do Chargebacks work?

When a consumer disagrees with the delivered products or services, they can file a complaint with their bank. The bank then submits a chargeback request on behalf of the consumer. Even if the reason for the chargeback is invalid, it still has to be processed. This also applies in cases where a refund has already been issued; the chargeback still has to be handled to prevent a double deduction from occurring.

When a merchant receives a chargeback, there are two options: accept the chargeback or dispute it. If you decide to accept the chargeback, the amount is refunded to the consumer's credit card and it is no longer possible to dispute the chargeback afterwards. It is important that you let us know when you accept a chargeback, so the dispute can be closed quickly. If you choose to dispute the chargeback, you must treat this as a serious matter and take the time to correctly compile and submit all evidence. Once the so-called representment package has been submitted, no further changes can be made. The information provided is assessed by external parties and forms the basis for the final outcome.

In some cases, when all chargeback cycles have been completed but there is insufficient evidence to demonstrate the invalidity of the chargeback, the dispute can be escalated to arbitration. Arbitration is the final stage of the dispute process and is invoked when the parties involved – the bank, the transaction processor, the cardholder and the merchant – cannot resolve the dispute. With arbitration, the costs are considerably higher than with a normal dispute, including filing and administration costs and costs per uploaded document, which can add up to five hundred euros per transaction. The losing party must pay all costs associated with the dispute.

It is therefore very important that all chargeback cases are handled carefully and that complete and thorough evidence is provided to avoid additional costs.

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How do I receive notification of a Chargeback?

Setting up Notifications is essential to respond to chargebacks in time. Pay. offers several options for this:

• Webhooks: Via webhooks you receive direct real-time updates about payments and events, including chargebacks. This allows you to take immediate action and avoid unnecessary delays.
• Email notifications: With email notifications you automatically stay informed of important events such as successful transactions, chargebacks or disruptions. This ensures you never miss a crucial notification.
• Admin Panel: In the Global Management System you can always view the current status of payments and chargebacks. In addition, detailed reports and statistics are available here, allowing you to analyze trends and optimize processes.

When you receive a chargeback notification, it is important that your account always has up-to-date contact details, such as email address and phone number, and that you have configured the correct email settings.

After the date of a chargeback you have 14 days to dispute it. It is important to take separate action for each chargeback. If no action is taken within this period, the chargeback is automatically accepted and you lose the ability to dispute it.

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When should I dispute a chargeback?

If you disagree with a chargeback, you can dispute it. Below you will find an overview of the different types of chargebacks and our advice on when disputing makes sense:

Fraud transactions

Non-fraud transactions

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How do you deal with Chargebacks?

If you receive a chargeback, it is important to act quickly and carefully:

1. Gather evidence: Make sure you have all relevant documents, such as order confirmations, communication with the customer, proof of shipment and terms and conditions.
2. Submit a dispute: If you believe the chargeback is unjustified, you can dispute it. Submit a dispute to the credit card company with all the evidence you have gathered.
3. Follow the process: Stay in contact with the credit card company and PAY.nl to follow the progress of the dispute.
4. Learn from the situation: Analyze the cause of the chargeback and take measures to prevent recurrence, such as improving your customer service or adjusting your return policy.

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Information request

The process usually begins with an inquiry or retrieval request. This means that the consumer, PAY.'s Customer Care, or one of the payment processors (issuer, credit card company or intermediary) contacts you to request more details about the transaction.

We always advise responding to these kinds of requests in a timely manner. This prevents a simple question from the consumer escalating into a chargeback and the additional costs that come with it.

From information request to chargeback

When an information request is not handled correctly or not handled in time, this can result in a chargeback. The process then proceeds as follows:

1. Chargeback notification
   As soon as a chargeback is filed, you receive a notification of this. Therefore, always make sure you have up-to-date contact details (email address and phone number) in your account.
2. Open CB Cases
   The reversal appears in your account under “Open CB Cases”. From that moment you have 14 days to respond. You can:
   • Accept the chargeback, or
   • Dispute the chargeback with convincing evidence.
3. Accepting a chargeback
   Do you believe the consumer is rightfully entitled to a refund? Then accept the chargeback directly by clicking on ‘Accept’.
4. Disputing a chargeback
   If you believe the chargeback is unjustified, you must provide evidence to demonstrate this. Depending on the reason for the chargeback, this evidence may vary.

Gathering and submitting evidence

To have a chance of winning the chargeback, convincing evidence is essential. Keep the following in mind:

• Language requirements: All documents must be submitted in English, in accordance with the card schemes' requirements.
• Documentation: Add images, screenshots and relevant correspondence.
• Contact history: Check whether the cardholder has previously made contact. Add screenshots of emails or messages, including your responses (translated into English if necessary).
• Proactive contact: If possible, contact the cardholder yourself, for example in case of a delivery delay. Document this properly.
• Reason-specific evidence: Make sure the evidence provided matches the specific chargeback reason.
• Adding an explanation: Write a brief explanation (in English) explaining why you believe the chargeback is invalid.

Uploading evidence

When your file is complete:

1. Go to the Chargeback request page.
2. Click the ‘Dispute’ button.
3. Upload all your evidence

Visa image

Mastercard image

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Reasons for Chargebacks and providing evidence

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Submitted Chargeback disputes

After we have received your evidence, we will carefully review the documents. Once we have received all the required and correct evidence, we will dispute the chargeback on your behalf. If any submitted information is not relevant to the chargeback, we will remove it beforehand. Should additional information or evidence be needed, we will contact you by email.

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Result of the chargeback

After a chargeback has been disputed, it can take up to 90 days before a final outcome is reached. If the chargeback is withdrawn by the bank, the case is closed immediately and the amount is credited back to your account balance. If the customer submits a pre-arbitration (also known as a ‘second chargeback’) and provides additional evidence, we will contact you for further information. If no ruling is made during the pre-arbitration phase, for example because the card-issuing institution rejects the pre-arbitration, the case is escalated and the card scheme is asked to make a final ruling.

If the evidence you provided is not convincing enough to demonstrate the invalidity of the chargeback, the case is closed in favor of the customer. In that case the chargeback is lost and you will not receive the amount back. If, on the other hand, a chargeback is reversed because your dispute was successful, we process the reversal (Chargeback Reversal) and credit the amount back to your account balance. You are always informed of this.