Chargebacks

The cardholder’s bank can make a chargeback on the transaction if:

• The incorrect amount was charged
• The card wasn’t valid at the time of the transaction
• The purchase was paid for another way
• The cardholder didn’t receive what they paid for
• The goods or service wasn’t as described or was faulty
• The transaction was duplicated
• The merchant used their own credit card
• The charge was above the merchant’s floor limit, but this amount wasn’t authorised
• The payment was for an old debt or bounced cheque
• The cardholder cancelled a reoccurring payment, but was still charged
• The merchant promised a refund but didn’t give it
• The sales receipt was changed without the cardholder’s authorisation

The cardholder’s bank can initiate a fraud chargeback on the transaction if:

• The transaction is illegal or prohibited
• The cardholder didn’t authorise the transaction
• The cardholder says they’re not liable for the transaction
• The authorisation for the transaction is declined

For fraudulent transactions, the chargeback amount is automatically debited from your account, even if you’ve already provided the goods or services. We’ll send you an email or letter explaining why your account was debited. 

Since there might not be a chance to appeal, consider contacting the cardholder to set up a different payment option or to recover the funds.

Card schemes like Mastercard and Visa specify which chargebacks are automated and which ones you can challenge. For example, some fraud and authorisation chargebacks are automated, and the chargeback will be debited from your bank account. However, you can challenge chargebacks related to processing errors and consumer disputes.

If an automated chargeback doesn’t meet the scheme’s criteria, the chargeback will be declined, and the funds returned to the merchant's bank account.

For more information, download the card scheme guidelines:

• Visa chargeback guideline
  

• Mastercard chargeback guideline

To avoid chargebacks from customer disputes, keep detailed records of your transactions. Make sure you have proof that customers got what they paid for. This may include:

• Printed sales receipts
• Other relevant sales information

Generally, a transaction can be disputed for up to 120 days from the date of the transaction or delivery date, whichever is later. However, Mastercard and Visa allow some chargebacks to be filed up to 540 days after the purchase date.

We recommend you keep your transaction records for at least six months.

To help you dispute a chargeback later, make sure your invoices, contracts and promotional materials include:

• Business name as it appears on a cardholder’s statement
• Business address
• Customer service contact details
  
• Return and cancellation policy details
• A complete description of goods and services provided
• Debit dates for regular instalments, such as memberships or subscriptions
• A complete description of the goods and services you’ve provided as well as a specific delivery time (if relevant)

For chargebacks relating to authentication (verification of the cardholder's identity), Mastercard and Visa have an automatic resolution process. This means, merchants are automatically debited and cardholders refunded in most cases.

We know it can be frustrating to have money debited before the case is resolved. However, we need to ensure that funds are available for the cardholder if the chargeback is ruled in their favour. Should the case be ruled in your favour, the funds will be returned to your settlement account as per the original transaction.

For more information, contact our Merchant Chargebacks team on 1800 649 205 (9am–5pm Syd/Melb time).

You can add an authentication protocol like EMV 3D Secure to transactions, which can help to prevent fraud for eCommerce and online payments. It works by quickly verifying cardholders, so they still get a smooth payment experience, but with added security benefits. This helps protect you against chargebacks relating to fraud. Find out more ways to protect your business from chargebacks.

Yes. The liability for all manually keyed transactions (MOTO) sits with you as the merchant. You should be careful when processing these transactions, if you choose to accept them.

Be aware of fraud risks – it’s a common technique used by fraudsters 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, call us on 1800 230 177 any time to turn this off.

We'll notify you through your preferred communication channel (either letter or email).

Previously, we sent all correspondence by post, as this was the only channel available at the time. Now we can send chargeback letters to your email address.

Chargeback emails will arrive the same day as the debit, so you can maximise the time available to prepare the necessary information.

To register for email updates, call us any time on 1800 230 177.

If a chargeback case has been raised against your business, do not process a refund for the customer.

You need to wait for the case to be resolved. 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’re processing refunds in future, always use the same card the customer used for the original payment. Using any other refund method – such as bank transfer, cheque, Western Union money transfer, or a different card – leaves you at risk of chargebacks on the original transaction.