If you use Clientbook Payments to process transactions, it is important to understand what chargebacks are, how they work, and what fees may apply if one is filed against your account. This article walks you through the entire process so you know what to expect.
What Is a Chargeback?
A chargeback happens when a cardholder contacts their bank or credit card company to dispute a transaction. The bank then reverses the charge, pulling the funds from your account while the dispute is reviewed.
Chargebacks can be filed for a number of reasons, including:
- The cardholder does not recognize the charge
- The cardholder claims they did not authorize the transaction
- The product or service was not received or was not as described
- A duplicate charge was processed
Chargebacks are a standard part of credit card processing and can happen to any business that accepts card payments.
What Happens When a Chargeback Is Filed?
When a chargeback is initiated against a Clientbook Payments transaction, here is what you can expect:
1. You will be notified.
BlueSnap (the payment processor behind Clientbook Payments) will send an email notification with the chargeback details. This email will include the invoice ID, the disputed amount, and the chargeback reason code. Clientbook's support team will also reach out to you with the relevant details and next steps.
2. The disputed amount is debited from your account.
When a chargeback is filed, the disputed funds are immediately pulled from your BlueSnap account. This is a standard part of the chargeback process and happens automatically.
3. You decide whether to dispute the chargeback.
You will have the option to dispute the chargeback. If you choose to dispute, Clientbook's support team will work with you to gather the necessary documentation and submit the case through BlueSnap. Common documentation includes proof of purchase, communication with the customer, proof of delivery, and any signed agreements.
4. The dispute is reviewed.
Once the dispute is submitted, the cardholder's issuing bank reviews the evidence and makes a final decision. This process can take several weeks, and the bank's decision is final.
5. You receive a verdict.
The chargeback will either be resolved in your favor (won) or against you (lost). If the dispute is won, the funds are returned to your account. If the dispute is lost, the cardholder keeps the funds, and the decision cannot be appealed.
Important Timeline Details
- Dispute window: Chargeback disputes must be initiated within 10 calendar days of the chargeback being filed. It is critical that you respond to the Clientbook support team as quickly as possible so the dispute can be submitted before the deadline.
- Review period: After the dispute is submitted, the issuing bank's review can take anywhere from a few weeks to a couple of months.
- Verdict notification: Clientbook's support team monitors the chargeback status and will notify you once a verdict is reached.
Fees Associated with Chargebacks
When a chargeback is filed against a transaction, the following fee applies:
Chargeback Fee: $15.00 per chargeback
This fee is charged by BlueSnap (the payment processor) and is applied to your account any time a chargeback is initiated, regardless of the outcome of the dispute. The chargeback fee is separate from the disputed transaction amount and is not refunded even if you win the dispute.
This fee covers the administrative costs associated with processing and managing the chargeback through the card networks. It is outlined in your Clientbook Payments Pricing Agreement.
For a full breakdown of all fees associated with Clientbook Payments, see: What Fees are Associated with using Clientbook Payments?
How to Reduce Your Risk of Chargebacks
While chargebacks cannot be completely eliminated, there are steps you can take to minimize the likelihood of one being filed:
- Verify customer identity. Before processing a payment, especially for remote or text-to-pay transactions, confirm that the person paying is the authorized cardholder. Request identification if needed.
- Keep clear records. Save all communication with the customer, receipts, proof of delivery, and any signed agreements. This documentation is essential if you need to dispute a chargeback.
- Be cautious with high-value transactions. For large purchases, take extra care to verify the customer's identity and intent. Consider requesting a photo of the customer holding their ID.
- Communicate clearly. Make sure your customers understand exactly what they are purchasing, the total cost, and your return or exchange policy before completing the transaction.
For more details on fraud prevention tools included with Clientbook Payments, see: Does Clientbook offer Fraud Protection when using Clientbook Payments?
What If I Lose a Chargeback Dispute?
If the issuing bank rules against you, the decision is final. Neither Clientbook nor BlueSnap can override or reverse the bank's decision. However, there are still some steps available to you outside of the formal dispute process.
For a full overview of your options after a lost dispute, see: What can I do if I lose a chargeback dispute?
Frequently Asked Questions
Is the $15 chargeback fee refunded if I win the dispute?
No. The chargeback fee is applied when the chargeback is initiated and is not refunded regardless of the outcome.
Can I prevent a customer from filing a chargeback?
You cannot prevent a cardholder from contacting their bank. However, maintaining good communication, clear documentation, and identity verification can significantly reduce the chance of a chargeback being filed.
How long does the dispute process take?
The timeline varies depending on the issuing bank, but the review process typically takes anywhere from a few weeks to a couple of months after the dispute is submitted.
Who decides whether I win or lose the chargeback?
The cardholder's issuing bank makes the final decision. Clientbook and BlueSnap submit evidence on your behalf, but the bank has the final say.
Will Clientbook handle the dispute for me?
Yes. Once you provide the necessary documentation and confirm you want to dispute the chargeback, Clientbook's support team will work with BlueSnap to submit and manage the dispute on your behalf.