Help & support
A chargeback is a reversal of a credit card payment that occurs when a cardholder disputes a transaction they didn’t authorise. This means you don’t get paid for the goods and services relating to the transaction, even if you’ve already provided them. You may also have to pay fees for the chargeback to be investigated and processed.
The cardholder’s bank (credit card issuer) can make a chargeback on the transaction if the:
If we are notified that a cardholder has disputed a transaction for any of the above reasons, we will contact you via email or letter and ask for supporting evidence depending on the dispute reason.
Generally, a cardholder can dispute a transaction for any of the above reasons. If you can’t prove that the cardholder authorised the transaction, then you’ll be liable for the chargeback.
The key difference between a chargeback and a fraud chargeback is that in the case of a fraudulent transaction, the chargeback amount is automatically debited from your account, even if you’ve already provided the goods or services.
The cardholder’s bank (credit card issuer) can make a fraud chargeback on the transaction if the:
If we are notified that a cardholder has disputed a transaction for any of the above reasons, we will send you a debit notification via email or post and debit your account immediately. The notification will explain why your account has been debited. As there may be no recourse of appeal, you may wish to contact your customer in order to arrange an alternative payment method or recovery of the amount.
For chargebacks relating to authentication (verification of the customer identity), Mastercard® and Visa® have introduced an 'automatic' resolution process. This means, in most cases, merchants are automatically debited and cardholders refunded.
If you have further questions, please contact our Merchant Chargebacks team on 1800 649 205 (9AM – 5PM AEST) or by email at MerchantChargebacks@cba.com.au.
While we understand it can be frustrating to be debited before the case is decided, we need to ensure that funds are available for the cardholder if the chargeback is decided in their favour. Should the case be resolved in your favour, the funds will be returned to your settlement account as per the original transaction.
The liability for all manually keyed transactions (MOTO) sits with yourself as the merchant. You should be careful when processing these transactions, if you choose to accept them.
Be fraud aware – a common technique used by fraudsters is to present a stolen card or stolen card numbers and claim the original card is 'damaged.'
If you don't want to process manually keyed or damaged card transactions, contact us at 1800 230 177, 1 to turn this off.
Previously all correspondence from the Bank was sent out by post, as this was the only channel available at the time.
Today we can send chargeback letters to your email address. These will arrive same day as the debit, so you can maximise the time available to prepare the necessary information.
If you would like to register, please contact us at 1800 230 177 so we can verify yourself and your email address. If you are the facility owner, alternatively you can email us at MerchantChargebacks@cba.com.au
The rules from Mastercard® and Visa® allow some chargebacks to be raised up to 540 days from the date of purchase. Best practice means you should be keeping all purchase-related material for a minimum of 540 days.
If a chargeback case has been raised against your business, do not process a refund to your customer.
You need to wait for the case to be resolved, and if a refund is required, it will be processed through the chargeback process. If you process a refund during this time, you may still be liable for the chargeback refund.
When you are processing refunds in future, you should always put these through the same card that the customer used to make the payment. If you use any other channel to process refunds (i.e., bank transfer, cheques, Western Union money transfer or transfer to a different card etc.) then you will still be at risk of chargebacks on the original transaction.
To reduce the risk of chargebacks caused by cardholder disputes, it’s important to have complete and up-to-date transaction records. A transaction can be disputed up to 120 days from the date of the transaction or the delivery date, whichever is later, so we recommend keeping your transaction records for at least six months. This will make it easier for you to find evidence of a specific authorisation.
To ensure your records will be sufficient to dispute a transaction, your invoices, contracts and promotional materials should always include the following information:
To learn about how you can protect your business from the risk of fraudulent credit card transactions, go to our Protecting your business page.
For more information about the chargeback process, please refer to the Merchant Agreement.
On 13th April 2018, Visa introduced new chargeback rules for all merchants, cardholders and banks to ensure that chargeback processes are applied consistently all over the world.
Under the new chargeback process, schemes will automatically determine if a chargeback is valid or not. If the chargeback is invalid, it will be returned to the cardholder’s bank – and merchants won’t need to do anything. This means merchants may receive fewer invalid chargeback disputes in future.
In some circumstances, merchants will still be able to dispute a chargeback. Schemes outline which chargebacks are automatic and which ones merchants can dispute. Some processing error or consumer dispute chargebacks can be disputed.
If merchants dispute a chargeback, they will need to provide documentary evidence to support their claim. If merchants haven’t provided satisfactory evidence, the dispute may become an automatic chargeback, and their account will be debited.
To reduce the risk of chargebacks caused by customer disputes, it’s important merchants keep detailed transaction records showing that each cardholder has received the goods or services they’ve paid for. This may include signed and imprinted sales receipts and any other relevant sales information.
As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the information, consider its appropriateness to your circumstances. Please view our Merchant Agreement, Financial Services Guide and Operator and User Guides at our Merchant Help Centre.
