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.
Chargebacks in Solidgate consist of 2 parts: chargeback and chargeback flow entity. Aentity presents the occurrence of the dispute process and always contains the actual chargeback type and status.
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.
|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.|
Chargeback statuses refer to the various stages of the chargeback process, including the investigation, and resolution of the claim.
|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.|
To handle chargebacks in Solidgate, merchants can use the Solidgate API, Webhook, or HUB.
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.
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
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’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 email@example.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|
||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)|
|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
|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||
|Cancelled recurring transaction Visa: 13.2 MasterCard: 4841 AMEX: C28 Discover: AP||
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.