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What is a chargeback?

A chargeback is a reversal of a credit card transaction and usually occurs when a cardholder raises a dispute with their financial institution (also known as the Issuer) in relation to a purchase made with their credit card.

A chargeback may result in the amount of the original sale and a chargeback fee to be deducted from the merchant’s account. The reasons why chargebacks occur vary however generally the result of a customer is being dissatisfied with their purchase or due to unauthorised or fraudulent activity/use of their card.

You can be liable and therefore debited under Condition 7.0 of the Merchant Terms & Conditions.

Important note

Westpac Group does not determine the rules and regulations regarding Visa, Mastercard or China Union Pay. All other banks/ financial institutions are governed by scheme rules and regulations.

We will do everything possible to defend the chargeback on the merchant’s behalf; however the nature of the dispute and the type of chargeback will greatly influence what actions we take.

Please also note that the supporting documentation provided must be supplied timely and if deemed insufficient may result in a chargeback.

Merchant can also contact their customer to resolve the dispute.

What is the process for a chargeback?

  1. Cardholder raises problem with their financial institution (known as the Issuer) or the Issuer discovers a breach of the card scheme rules
  2. Issuer raises a Chargeback via scheme
  3. Westpac Chargeback team receive the Chargeback and may request documentation from the merchant to verify the transaction. The merchant has a set timeframe to respond to these requests, usually 14 days
  4. If the chargeback is invalid, Westpac Chargeback team will decline the chargeback and return it to the Issuer
  5. If the chargeback is valid, the chargeback amount is debited from the merchant’s account and notification is provided to the merchant. A chargeback fee may also be charged to the merchants account.

 

Most Common Reasons for Chargebacks

Chargeback Reason

Why this has happened

Unauthorised/Fraudulent Transaction

Cardholder did not authorise the transaction/s, transaction is fraudulent.

Cardholder does not recognise transaction

This can occur when a cardholder does not recognise your trading name on your credit card statement.

 

Tip: You should always trade under the same name you have provided for your merchant facility and ensure it appears on your transaction receipts.

Authorisation for Transactions

Appropriate authorisation was not obtained. This can occur when a transaction has been processed above the floor limit and authorisation was not obtained.

The chargeback may be raised under theses following conditions:

  • Account number not on file
  • Declined authorisation
  • Expired card
  • No authorisation.

Processing Error

Cardholder/ Issuer believe transaction has been processed incorrectly.

Common scenarios under this charge back reason:

  • Incorrect transaction amount/card number
  • Late presentment of the transaction
  • Transaction paid by other means. (i.e. cash or a different card)

Duplicate/Multiple processing

Cardholder claims transaction for same goods/ services was processed more than once.

Non receipt of goods/services   

Cardholder claims goods/services for the transaction has not been received/rendered to the agreed-upon location or by the expected delivery date.

 

What we need from you

Evidence required to refute the chargeback

You may be liable if:

Signed imprinted/PIN voucher for all card present transactions by the required timeframes and all surrounding information including one or more of the following:

  • A clear description of the purchased goods or services
  • Transaction amount
  • Transaction date
  • Your merchant trading name
  • Your merchant location.
  • The transaction processed was manual/card not present
  • If your response is not received by the required timeframe.

Supporting documentation to prove that appropriate authorisation was obtained.

  • You did not obtain the appropriate authorisation within timeframe for the transaction in dispute
  • Transaction processed over your floor limit
  • Card was expired prior to transaction date
  • Transaction was processed to a card that does not match a valid card number on file for the Issuing bank.

    Signed transaction receipt and all other related signed documentation to prove the transaction was processed:

  • That is not paid for the same merchandise or service by other means
  • Within the mandatory time limit
  • With correct transaction amount/card number.

No legible transaction receipt and documentation is provided to prove the transactions was processed accurately.

  • Two separate signed or imprinted transaction receipts or other records to validate separate transactions
  • Documentation to show that a refund was processed to offset the disputed transaction through the same payment channel the cardholder used to make the original payment.
  • You are unable to provide evidence to support separate transactions
  • You accidently processed the same transaction twice or more for the same purchased goods &/or services
  • You did not process a refund via the same payment channel as the disputed transaction.

Signed documentation to prove that the cardholder or cardholder authorised recipient received the merchandise/service by the expected delivery date and at the agreed location.

  • Goods and/or services were not received by the appropriate recipient at the agreed location by the expected delivery date
  • You are unwilling or unable to provide the goods and /or services and have not refunded the cardholder via the same payment channel as the disputed transaction.