Chargebacks

Manage chargebacks effectively to minimize losses and protect your business

A chargeback occurs when a customer files a complaint with their card-issuing bank, claiming that a transaction made with their card was unauthorized or there was an issue with the product or service they received. Common reasons for chargebacks include fraudulent transactions, duplicate charges, or unsatisfactory goods or services.

In the Solidgate, the chargeback process typically follows these steps:

The customer files a chargeback request with their card-issuing bank.
The issuing bank reviews the request and, if deemed valid, reverses the transaction, temporarily crediting the customer’s account.
The acquiring bank (the bank representing the merchant) is notified of the chargeback and debits the merchant’s account for the transaction amount and any associated fees.
The merchant, through the Solidgate, is informed of the chargeback and provided with a chance to dispute it by submitting evidence to support their case.

If the merchant’s evidence is deemed sufficient, the chargeback may be reversed, and the funds returned to the merchant’s account. If not, the chargeback remains in place, and the customer keeps the refund.

Chargeback`s structure

Chargebacks in Solidgate consist of 2 parts: chargeback and chargeback flow entity. A chargeback Webhook entity presents the occurrence of the dispute process and always contains the actual chargeback type and status.

Chargebacks sample

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"chargeback": {
  "id": 148812,
  "dispute_date": "2019-07-12",
  "settlement_date": "2022-07-10",
  "amount": 100,
  "currency": "USD",
  "reason_code": 10.4,
  "status": "reversed",
  "reason_group": "Fraud",
  "reason_description": "Fraud – Card-Absent Environment",
  "type": "2nd_chb",
  "chargeback_flow": {
    "id": 12345,
    "amount": 100,
    "dispute_amount": 0,
    "currency": "USD",
    "type": "2nd_chb",
    "status": "reversed",
    "date": "2022-07-10",
    "settlement_date": "2022-07-10",
    "updated_date": "2022-07-11",
    "deadline_date": "2022-07-12",
    "arn_code": 7.487115236108244e+22
  }
}

The chargeback flow describes the stages of the dispute process, like start disputes, pre-arbitration, or arbitration, and appears as separate entities similar to transactions inside the order.

cb_fl_1.0

Types

Type	API name	Description
1st Chargeback	1st_chb	The customer challenges a transaction with their card issuer by creating a chargeback.
2nd Pre-arbitration	2nd_chb	The issuer declines your defense and opens a pre-arbitration.
Arbitration	arbitration	The issuer/cardholder disputes the merchant’s second presentment, and the case goes to the issuer network (Visa, Mastercard, etc.) for arbitration.

Statuses

Chargeback statuses refer to the various stages of the chargeback process, including the investigation, and resolution of the claim.

Status	API name	Description
In progress	in_progress	Solidgate received the Chargeback. The merchant should decide whether to accept or to defend this chargeback.
Documents sent	document_sent	Solidgate received the supporting documents and forwarded them to the card scheme. It is no longer possible to change these documents.
Reversed	reversed	Successfully challenged chargeback. We transferred the disputed amount to the merchant’s account. The card issuer is still reviewing the defense. If they accept, this either it is final or we have received a 2nd chargeback/arbitration and mark the previous chargeback as reversed.
Accepted	accepted	If you accept the dispute, fail or choose not to send your defense documents, this is the final status. We transferred the disputed amount to the requester’s account.
Resolved	resolved	The dispute process is now resolved at the pre-dispute stage via the automatic refund by Proactive Dispute Resolution functionality. Resolved disputes will not count against the dispute ratio (RDR status).
Resolved reversal	resolved_reversal	If a refund and RDR occurred simultaneously, the chargeback will be canceled (with RDR status) to reverse any double credit to the cardholder.

Receive chargebacks

To handle chargebacks in Solidgate, merchants can use the Solidgate API, Webhook, or HUB. Solidgate API offers merchants a detailed report of chargebacks for specified date ranges. The request needs a Merchant ID, signature, and dates in UTC+0.
The API report also supports pagination, and the response includes a next_page_iterator field that can be used to retrieve the next set of results.

Solidgate Webhook
To prevent duplicate events, make event processing idempotent by logging event IDs and avoiding processing logged events. Solidgate’s header parameters and JSON response schema provide detailed chargeback and order information for efficient processing.

Chargeback and order status are determined through enumerated values, while the card scheme provides the reason code and description for the chargeback. The Guide
Gain a better understanding of the nature of your chargebacks and effectively manage them. reason code group can be utilized for analysis and segmentation purposes.

Solidgate HUB
Solidgate HUB’s Disputes section enables users to manage chargebacks and disputes. With search options based on criteria like order ID and email, users can easily locate disputes and access comprehensive information.
The history feature helps monitor dispute progress and take necessary actions.

Respond to chargebacks

If you possess evidence that the transaction is legitimate or the transaction amount is substantial, you have the option to defend yourself against disputes.

If you want to dispute the chargeback you should send documents with the compelling evidence to support@solidgate.com. If you do not provide evidence until the chargeback deadline, the dispute will be automatically accepted. Requirements for the documents are stated below.

REQUIREMENTS FOR THE PREPARATION OF DOCUMENTS FOR DISPUTE:

EXAMPLE

The total quantity of pages within one case is no more than 19 pages.
The format of all pages within one case should be either “portrait” format only or “landscape” format only.
All pages should be A4 size, other sizes do not acceptable.
Acceptable file format - DOCX.
For most chargeback/pre-arbitration/retrieval request decision provision, there is a fixed period provided ! After shown time frame chargebacks and pre-arbitrations will be accepted (lost).
You could use the example of the document attached to create your evidence.

Compelling evidence *Please provide as much information as possible about the user below the text (screenshots of the agreements, customer's documents, proofs of using the product)

REASON CODE	DIGITAL PRODUCT OR SERVICE	PHYSICAL PRODUCTS
Fraud - card-absent environment Visa: 10.4 MasterCard: 4837 AMEX: F29 Discover: UA02	Description, date, and time of the products or services successfully downloaded. The evidence must also contain at least two of the following pieces of information: Customer's IP address and their device's geographical location at the time of purchase Device ID and name of the device Customer name and email address linked to their customer profile Evidence that the customer logged into their account for your business before the transaction date Evidence that your website or app was accessed by the cardholder for purchase or services on or after the transaction date Evidence that the same device and card used in the disputed payment was used in a previous payment that was not disputed Description of the digital goods and the date and time they were purchased and downloaded. Record of previous non-disputed payments.	Evidence such as photographs or emails to prove a link between the person receiving products and the cardholder If the products are collected from a physical location, you must provide: Cardholder signature on the pickup form A copy of identification presented by the cardholder Details of identification presented by the cardholder/li> The address to which a physical product was shipped. The shipping address should match a billing address verified with AVS. You must also provide documentation as proof that a product was shipped to the cardholder at the same address the cardholder provided to you. The date on which a physical product began its route to the shipping address Courier's GPS location proving that product has been delivered
Merchandise/Service not provided Visa: 13.1 MasterCard: 4855 AMEX: F29 Discover: UA02
Duplicate processing/Paid by other means Visa: 12.6 MasterCard: 4834 AMEX: P08 Discover: DP	The charge ID for the previous payment that appears to be a duplicate of the one that is disputed. An explanation of the difference between the disputed payment and the prior one that appears to be a duplicate. Documentation for the prior payment that can uniquely identify it, such as a separate receipt. This document should be paired with a similar document from the disputed payment that proves the two are separate. Copy of invoice of two separate orders.	The charge ID for the previous payment that appears to be a duplicate of the one that is disputed. An explanation of the difference between the disputed payment and the prior one that appears to be a duplicate. Documentation for the prior payment that can uniquely identify it, such as a separate receipt. This document should be paired with a similar document from the disputed payment that proves the two are separate. Copy of invoice of two separate orders. A shipping label or receipt for the disputed payment.
Cancelled recurring transaction Visa: 13.2 MasterCard: 4841 AMEX: C28 Discover: AP	Any server or activity logs showing proof that the cardholder accessed or downloaded the purchased digital product. This information should include IP addresses, corresponding timestamps, and any detailed recorded activity. Your subscription cancellation policy, as shown to the customer. An explanation of how and when the customer was shown your cancellation policy prior to purchase. A notification sent to the customer of renewal or continuation of the subscription. Proof that notice of upcoming billing was sent to cardholder 10 days before transaction. Proof that the services were used between the billing date and the cancellation date. The Cardholder requested a cancellation for a different date and services were provided until this date.	Your subscription cancellation policy, as shown to the customer. An explanation of how and when the customer was shown your cancellation policy prior to purchase. A notification sent to the customer of renewal or continuation of the subscription, or an acknowledgment from the customer of their continued use of the product or service after the date they claim they cancelled the subscription. Proof that notice of upcoming billing was sent to cardholder 10 days before transaction. Proof that the cardholder did not return the merchandise.

You should consider accepting the dispute if:

You do not possess the information needed to remedy the chargeback reason code.
The transaction amount is not high enough to spend resources on compelling evidence.
The transaction amount does not outweigh the risk of losing the chargeback fee for the second booked chargeback.
The transaction is known to be fraudulent.
The customer has returned the goods, or you have failed to deliver the goods.

Related articles FAQ

Chargeback (Disputes) FAQ

What is VISA Resolve Online? (VROL)

Why the chargeback amount greater than the original payment?

Liability Shift: What it is and why it matters for merchants

Cardholder & Merchant initiated transactions (CIT and MIT)

Solidgate HUB - Disputes Search & Filters