What is the difference between a refund and a chargeback?
A chargeback is initiated by the cardholder and can result in the return of the funds but does not have to. There is always a chance to try to defend the chargeback by providing compelling evidence.
A refund is a payment transaction initiated by the merchant itself. It refers to a specific card operation that allows returning the whole or a part of the transaction amount.
How can a guest request a chargeback if he/she stayed in our property and used the services we provided?
The processes of the chargebacks are in line with national and European Union consumer legislation.
Consumers, having used a payment card to purchase good or services, may be entitled to be reimbursed by a chargeback procedure through the card-issuing bank as per the legislation of the European Commission.
Directive 2007/64/EC on payment services in the internal market (PSD) and Directive 2008/48/EC on credit agreements for consumers (CCD) form the main legal bases to request a chargeback in the following cases:
* the transaction is not authorized by the consumer/cardholder
* the trader does not respect the consumer's rights
* in the case of bankruptcy.
We had all rights to charge the card. Why Issuer is on the cardholders side and it is so easy for them to request a chargeback?
The chargeback process is a relatively simple one for cardholders, generally requiring only a phone call, email or fill in the dispute form and a reason for the dispute. It’s the cardholder's word against the merchant’s, and the system is set up to protect cardholders, not businesses
How will I know if I have received a chargeback?
Once the bank initiates the chargeback, the property is being notified to the email that is set-up as a chargeback notification email in the Merchant Integration.
If the property has “Create chargeback task” enabled, it will be visible in the Task section in Mews Operations.
Where can I set-up the chargeback notification email?
Please contact the Customer Support Team at [email protected] and we will be happy to help you with any changes related to the chargeback notifications email.
Is it possible to have two or more email addresses to notify us about chargebacks?
Unfortunately, it is not possible. We can offer the below alternatives:
• Create a mailing group as 1 address and we can set up the notifications to be sent there.
• Set-up in your inbox a forwarding rule to any address you want.
Why Mews deducted the disputed amount from us if there is no outcome about the chargeback just yet?
The flow of the dispute is the following:
- Client disputing the transaction with his bank.
- The bank requests more information from the Payment Gateway provider about the transaction and deducts the charged amount from them.
- Payment Gateway provider notifies property about the chargeback and deducts money from Mews.
- Mews deducts money from the Hotel to cover what the Payment Gateway provider deducted from the Mews account.
Once the dispute is opened and the funds have been deducted, the merchant has the opportunity to submit evidence in order to prove the charge was legitimate and potentially overturn the dispute.
Why the amount is higher/lower than the originally charged transaction?
It can happen in the below cases:
- Cardholder claimed partial chargeback rather than the full amount.
- Currency exchange difference - e.g. customer was charged in EUR and their bank account has default currency USD. The cardholder will file the dispute in USD, and it will be converted to EUR as per the issuing bank exchange rate.
What are the possible outcomes of the dispute process?
You win the case - you will receive the disputed amount back with your next payout + 15 EUR dispute process fee that was deducted when the chargeback was received.
You lose the case - it will stay as it is, and nothing is going to be returned to your account.
Why we are charged 15 EUR for the chargeback?
15 EUR represents the fee for the dispute process itself and is being charged by the issuing banks. Every time the banks start the dispute process, the fee is charged. These fees are meant to cover the administrative costs associated with the chargeback process. On average, the fees typically fall somewhere between EUR 22 and 55 EUR, but the fixed fee merchant charge us is 15 EUR and it is mentioned in the Corporate Agreement.
What if the customer agrees to cancel and withdraw their dispute?
In order to start the withdrawal process for a dispute, the customer must notify their bank that they wish to withdraw or drop the dispute.
The bank should provide the cardholder with a letter of withdrawal, typically via mail within 7 business days. If they don’t receive a physical letter, the customer should get a notification electronically either via email or in their associated banking account online.
Provide us with that letter as soon as possible and we will forward it to the merchant provider on your behalf and the case will be closed in your favour.
I agree with the customer's claim. How should I proceed?
Let the Risk Team know that you are accepting the dispute and we will handle it from our side. Send an email to [email protected].
Can I cancel the chargeback and refund the cardholder without being involved in the dispute process?
No, once the chargeback was created the dispute process have started. The only way to refund the cardholder is to accept the chargeback.
Can I add additional documents to already submitted evidence?
Evidence can only be submitted once, and nothing can be added to already submitted evidence.
How long does it take for the bank to decide?
The bank will make the decision between 60-75 days after the evidence due date. The decision is the bank’s alone, and the outcome is final.
How am I notified about the bank’s decision?
Notification with the outcome is sent to the chargeback notification email as per your set-up.
Can I challenge the lost chargeback with Stripe?
Currently, Stripe does not offer an option to open the Arbitration case, after the chargeback was marked as "lost"
Although the payment gateway provider transmits the evidence you submitted against the dispute, the dispute process, including the outcome, is managed entirely by the bank. The bank's decision is final and cannot be appealed or challenged.
Can I challenge the lost chargeback with Adyen?
Yes, by filing the Arbitration case. Please note that doing that is quite expensive.
Mastercard charges an initial filing fee of 150 EUR and an additional administrative fee of 250 EUR. The party that loses the Arbitration case is liable for both fees (on top of the chargeback amount).
Visa does not charge any fees upfront, but the party that did not meet the dispute conditions and requirements according to the Scheme rules will be held for a filing fee of 500 USD (the fee is charged on top of the disputed amount).
What does it mean if I receive 2nd chargeback after winning the case? ( for Adyen users)
It means that you can no longer provide additional documentation at this stage and the final status of the dispute is "Lost"
If you have strong additional evidence and you would like to challenge it, and the Arbitration case can be opened.
Can I get more details on why the bank declined the evidence we provided?
Unfortunately, not. The only one who has the full information about the card details and the cardholder is the issuing bank. Many factors can affect the bank decision which we at Mews, and the payment gateway provider are totally unaware of and this is an internal bank procedure that cannot be shared with anyone. Banks do not share any additional information with anyone due to their strict privacy rules.
I still do not agree with the Issuer and would like to continue the dispute process. Can I pursue criminal charges against the guest?
Yes, it can be an option. Challenge can be that many prosecutors may not have the resources or will to make such crimes a priority. The Merchants best option can be to file a civil lawsuit that may include causes of action of fraud, breach of contract and other related regulations.
Please note that each country will have different laws and each specific case should be discussed with the lawyers
I received a chargeback for a virtual credit card from an OTA. How should we proceed?
When you receive a chargeback on the VCC, the best would be to contact the issuer of the VCC – the OTA and try to resolve the dispute with them directly. VCC chargeback means that OTA refunded the guest and for some reason claiming money back from you.
Can we extend the deadline for the evidence submission that is stated in the notification email from 48 hours to longer?
We put 48 hours and want properties to follow up asap as banks can set up evidence upload deadline from 7-65 days. In rare cases, but still can happen, the bank can suddenly change the deadline. This is why we want you to follow up the soonest, in order not to miss any deadline.
If you want to learn more about how to prevent chargebacks from happening, see below.