After accepting a credit card payment, the cardholder can dispute the charge to their card. This means their payment is reversed and debited from your bank account.
The good news is that there are simple things you can do to protect yourself against chargebacks.
Chargebacks explained
Key points and timeframes to remember
Understand how money moves
Managing customer disputes
Other consequences to chargebacks
Chargebacks explained
A chargeback is a return of funds used to make a purchase by credit card. When a customer disputes a purchase, their credit card company reverses the charge, crediting back the funds to them, and debiting your business’ account.
Key points and timeframes to remember
- You have 10 days to respond to the dispute notification.
- The funds will be debited from your bank account while under dispute.
- You can expect the entire process to take up to 90 days if you choose to fight the chargeback case and provide the required documentation.
- If the bank resolves the dispute in your favor, the disputed amount, including the $15 dispute fee, will be deposited back into your bank account.
Understand how money moves
When you receive a chargeback, your customer's bank will automatically debit Wave. We are unable to prevent this from taking place, which is why we are obligated to collect the funds from you.
Managing customer disputes
Wave's loyalty is to you, our customer. If your customer has unfairly disputed a charge and you have decided to fight the chargeback, we will advise you on the evidence you need to prepare, and assist you by submitting it on your behalf to your customer's bank.
It is important to understand, however, that Wave is not involved in any way in deciding whether a customer dispute and chargeback is valid. This is entirely decided by your customer's bank.
In the event you don't want to dispute a chargeback from a customer, the dispute process is over. We advise your customer's bank that you accepted the chargeback, and no further action is required.
Other consequences to chargebacks
Nobody likes customer disputes, but chargebacks can occur from time to time, and will have a financial impact on your business if not addressed. Provided you are processing card payments regularly and have few chargebacks, we can continue to process payments for you. However, excessive chargebacks may indicate underlying problems with your business process or how you are managing fraud risk, and may result in account restrictions.