Responding to a Chargeback
Responding to a Chargeback
What is a chargeback?
A chargeback is a notification that a customer is refuting the charge on their account. Chargebacks are rare in the insurance industry, but they do occur. The most common reason for a chargeback is that the cardholder does not recognize the charge on their credit card. (ePayPolicy ensures that it is the insurance entity’s name that appears on the credit card statement and not our name.)
Keep in mind that the chargeback notification is the start of the process; not the end. As the “merchant” on the chargeback you have the opportunity to respond and dispute the chargeback.
How to I dispute the chargeback?
We recommend two steps to dispute the chargeback. First, please gather any and all documentation you have between you and your customer leading up to the chargeback. This can include email correspondence, signed contracts, or any other written documentation. Each chargeback has a deadline to respond. Typically, a Visa or MasterCard transaction will allow for a 30 day response window while American Express allows for a 7 day response window.
The second step is to contact the customer and notify him that you have received the chargeback notification. If the chargeback was a mistake on their part, they should notify their bank that they will allow the charge to go through.
IMPORTANT: Even if the customer has agreed to let the original transaction go through, you will still need to send the requested documentation to ePayPolicy. This is because the chargeback process has already started and the issuing bank is waiting on a response. If no response is given, the chargeback will be approved by default.
If you respond with required documentation in the allotted timeframe and the issuing bank does not fight your dispute, it will take approximately 60 days for you to win by default at which point the funds will be returned to your account.
When will funds be withdrawn from my account?
Your account will automatically be debited at the point the chargeback is reported. The funds will be returned to you if you win the dispute.
What charges will I incur as the result of a chargeback?
You will be assessed a chargeback fee of $25 when the chargeback is reported in addition to the full gross amount of the transaction including fees. The $25 chargeback fee will appear on your monthly statement.
What are my next steps if I lost the dispute?
If you lose the chargeback dispute on a Visa or MasterCard transaction you will have the opportunity to take the chargeback to arbitration. Visa’s fees for arbitration are $500 ($250 to file and $250 to review) and MasterCard’s fees are $450 ($150 to file, $150 to review, and $150 once a decision is made). The arbitration fees will be refunded to you if you win the arbitration. In our experience, chargeback arbitration is quite rare. We’ve found that our customers have had an easier time resolving the dispute before it gets to this point.