When will I be notified of a chargeback, and when will the funds be removed from my checking account?
The Chargeback Processing Center will mail a chargeback notification when the debit is transmitted to your bank. This debit may take 2-3 business days to be reflected in your bank account. Typically, you will receive a notification at the same time your checking account is debited if not using an Online IMS Service. To ensure you receive the most time possible to respond to your case, ensure that your account mailing address is up to date.
Why is there a reserve on my account?
If the Chargeback Processing Center encounters difficulty at ANY point when deducting the chargeback amount from your bank account, etc., it is the processor’s obligation to remedy any amount not collected. In most cases, a reserve is set up for security purposes to protect the Merchant Processor from any loss due to chargebacks. The reserve is held in case of default by a merchant. (Further details are located in your Merchant Account Agreement and Terms & Conditions.)
What is arbitration?
Arbitration occurs when a disputed transaction cannot be settled through the chargeback process. The deciding body is the relevant card association. You cover the cost for all fees, penalties and the transaction value where the case is not successfully defended.
What is an Inadequate Descriptor Fee?
This is charged when the retrieval request or chargeback is responded to with inadequate information and descriptors that don’t match what you submit with the retrieval request. This is entirely in the hands of the issuing bank (Visa).
How does a merchant respond to a chargeback?
Merchants can use our MerLink online dispute portal at merlinkdrs.com to both review and respond to disputes (submitting a rebuttal). Responses can also be submitted via merlinkresponse.com, regardless of whether or not the merchant has been granted access to the online dispute portal.
In addition, and if preferred, responses can also be emailed to chargeback@shift4.com or faxed to 706.644.5210.
How do I gain access to the MerLink online dispute portal?
Merchants may request MerLink access by sending an email to Shift4 at chargeback@shift4.com. Be sure to include both first and last names of the user, individual email addresses, and associated Merchant IDs (MIDs).
What do I need to include with my chargeback response?
Primarily, the supporting documentation you will need to provide will be dictated by the type of dispute based on the chargeback reason code.
In addition, it is recommended that you read all dispute notification details, including information provided by the issuing bank, to address all of the cardholder’s concerns and to provide an accurate and complete response with your submitted documentation.
Please note that if the dispute were to escalate to the pre-arbitration phase, you will not be allowed to provide additional documentation supporting your position, so it is important to provide all the required information with your initial response.
For a set of guidelines that outline required response documentation for each of the card network dispute reason codes, you can send a request by email to chargeback@shift4.com, or you can call the Shift4 Dispute team at 800.963.1701.
Why am I given a limited time to respond?
Each card network (e.g., Visa, Mastercard, etc.) provides specific timeframes for responding to disputes, which are used to calculate the date by which merchants must submit their responses.
We encourage all merchants to review and respond to chargebacks as soon as they are received to allow for any additional time for communication between you and the dispute team to help ensure that all required documentation has been provided to best defend against disputes.
What is the maximum timeframe allowed for chargeback initiation?
Cardholder/issuing bank can initiate a chargeback up to 120 days from the original transaction date. However, depending on services being rendered, an issuer has a maximum of 540 days to initiate a dispute on behalf of their cardholder.
Can a chargeback case be reopened?
Request to have a chargeback reopened can be submitted, but in most cases, the issuing bank/card networks do not accept a response after the case has been closed per the card network’s (e.g., Visa, Mastercard, etc.) required response timeframes.
Can chargebacks be removed from my processing history?
Chargebacks cannot be removed as history from your processing account. For that reason, we encourage merchants to conduct business per best practices to help prevent the occurrence of chargebacks/retrievals.
Why am I debited for a chargeback before I have a chance to respond?
When a chargeback is received, it equates to an automatic debit by the Issuing bank. But you are still provided with the ability to rebut the chargeback and possibly have the funds from the dispute reversed.
Why am I being assessed a chargeback fee when my previous processors did not?
You were most likely previously charged a chargeback fee as part of a bundled cost and not as a separate charge. Other processors may include chargeback fees with alternate charges, such as credit card fees, licensing fees, or other miscellaneous fees.
For a reversed chargeback, will the chargeback fee be reimbursed?
No, chargeback fees are not reimbursed. Since a chargeback is a forced reversal of the transaction by the issuing bank/cardholder, and because the bank and the credit network are involved, these fees are assessed to cover associated processing costs.
Does Shift4 make available chargeback protection?
No, we do not offer a chargeback protection program, but we do assist our merchants by offering guidance and tools on how to keep chargebacks at a minimum.
What is EMV?
EMV stands for Europay, MasterCard®, and Visa® and refers to the increased security of payment card transactions using a chip embedded in credit, debit, and prepaid cards.
Use of EMV chips in a card transaction is more secure than swiped transactions. They help reduce fraud-based chargebacks while offering merchants reduced liability for better chargeback protection. The use of EMV should be encouraged over swiping and certainly instead of key-entering transactions. The use of EMV versus swiped in the eyes of the card associations also protects merchants through an enhanced liability shift when they use EMV-compliant terminals and processing.
I have an EMV-enabled terminal, so why am I still getting chargebacks?
Any sales you process could be disputed for a variety of reasons. While chip terminals lower the chances of receiving fraud-related chargebacks, chip-based technology will not prevent all chargebacks from occurring.
What is Chip & PIN?
The term “chip & PIN” refers to the microchip found in a payment card that can be used in conjunction with a personal identification number (PIN) known only by the cardholder in order to validate the use of the card being presented.
What is the difference between PIN-preferred and Signature preferred cards and the impact on chargebacks?
In Europe, the more common type of card is PIN preferred (entry of a PIN). In the U.S., most banks issue signature preferred cards (signature provided).
As an example, if a person from Europe comes to the U.S. and conducts a purchase with a PIN-preferred card, and they dispute it, a chargeback is hard to contest. That’s because most POS systems in the U.S. are configured for signature preferred and won’t prompt for a PIN.
Also, a U.S. citizen might ask their issuing bank to provide them with a PIN-preferred card if they are going abroad and want to avoid any issues when they use their U.S.-issued signature preferred card. Upon returning to the U.S., the customer could make a domestic purchase and dispute a charge using their PIN preferred card and we have the same situation.
If a card can’t be dipped or swiped when conducting a purchase, can I manually enter the card information?
You can, but there are inherent risks if you manually enter/key card details, such as the case with telephone orders as an example. In these instances, you have less protection from fraud/unauthorized chargebacks, as you can no longer prove that the card was (1) present at the time of purchase and (2) that the true owner of the card initiated the purchase.
Your best protection is to insert the card for chip use, followed by swiping, and as a last resort, manually keying the card details.
What’s the chargeback risk when customers tap their cards?
Tapping a card when conducting a purchase uses near-field communications (NFC) for contactless card use. And because contactless cards are generally EMV cards, they utilize the same encryption technology, which helps prevent the creation of counterfeit cards.
But, since contactless cards don’t necessarily require the entry of a PIN, an unauthorized person could make a purchase if they came into possession of the card.
All that said, tapping, just like dipping, is much safer than swiping.
When I receive chargebacks for purchases involving currency conversion, why is the dispute amount often greater than the amount of the original transaction?
When a cardholder initiates a chargeback, currency conversion is applied based on the conversion rate when the chargeback is performed and not the conversion rate used at the time of the original purchase.
How do I prevent chargebacks where tips were involved?
Under certain circumstances, if the gratuity exceeds 20% (Mastercard) or 25% (Visa) of the authorized amount and the merchant does not obtain an additional authorization, it may result in a chargeback. Per card brand regulations, a second authorization is required if the gratuity is over the variance allowed.
Does anyone cover bounced check fees because this chargeback was taken from my bank account?
Per the Shift4 Merchant Account Agreement and the Terms & Conditions, you agree to keep sufficient funds in your bank to cover any chargebacks.
Can a credit card processor protect me from a chargeback?
It is extremely limited as to what a processor can do to protect a merchant from chargebacks. Harbortouch does offer a Chargeback Support team that can explain chargeback case documents and help you respond to the case. However, the cardholder does hold certain liberties in questioning and disputing transactions made to their credit card account per the card association. Please contact chargeback@shift4.com for additional information.
I was told that an authorization guaranteed payment. Is this the case?
An authorization will only verify that a credit card account is active and that there are funds available. However, there are many different reason codes as to why a cardholder or their issuing bank initiates a chargeback.
Get the cardholder's signature, and have them sign your cancellation or return policy on all orders. It's also important to manage the expectations with your customer up front. Document your efforts and work with your customer to resolve issues.
How long do I have to respond to a chargeback?
The response by dates are always included on the notices; however, generally, it is 10 days from the notice date.
Is there a faster way to get chargeback notices?
Yes, if the merchant provides a fax #, it can be added to their account, and notices would be faxed instead of mailed. However, if the fax fails, then it will be mailed.
Can you email me chargeback notices instead of mailing?
Yes. A merchant can provide an email address to receive email notifications.
Why do I see a debit, but was not notified?
Debits for chargebacks are sent out same-day notices are mailed/faxed. If a merchant is set up with mail notification, the merchant will always see the debit prior to getting the letter, as it takes a couple of days to get to them.
Why did I receive a chargeback due to getting authorization for part of the amount on a card, but in Lighthouse Transaction Manager, I was able to settle the full amount, in TSYS only?
Note: This is specific to the old TSYS code.
The new TSYS code for EMV (displayed as TSYSVLL) fully supports Partial Authorization.
Prior to Shift4's recent recertification for EMV with TSYS, TSYS did not have a flag in their system for us to programmatically tell them that we do or do not support Partial Authorization. As a result, even if we do not send an indicator requesting a Partial Authorization, TSYS may return a Partial Authorization result. As Shift4 is not certified for Partial Authorization on the older TSYS code, we are unable to parse out the Partial Authorization details and send them to the interface; thus, the transaction is treated as if the full amount were authorized. Unfortunately, we cannot prevent this behavior on the old TSYS platform.
Additional Information:
On the updated TSYS code, if Shift4 does not receive the Partial Authorization flag from the interface, we will not send it to TSYS, and transactions with insufficient funds should Decline as expected. If we do receive the flag (the Interface must be certified to handle this functionality), we will send this to TSYS and will return the correct authorized value to the interface so they may prompt for the remaining amount.
Note: You may incur setup fees for migrating to the new code.
What is Shift4's role in our merchants facing chargeback disputes with their customers?
For gateway merchants, Shift4's role must remain neutral during such an event. What this means is that we are in no way involved in delegating the actions of our merchants toward disputing any chargebacks. However, we are able to assist with researching transaction activity and the history of a charge in Lighthouse Transaction Manager.
We’re Here to Help
At Shift4, we want to ensure that all our merchant clients are equipped to handle the processing of disputes and their responses in a way that best ensures a favorable outcome and reduces merchant risk.
We’re available to answer all questions as they relate to the dispute process as well as assist you with specific types and individual dispute cases you may have received.
Feel free to contact Shift4’s Chargeback department during normal business hours at 800.963.1701. We can be reached Monday through Friday from 9:00 a.m. - 6:00 p.m. ET.
We can also be reached by email to address any of your questions or dispute processing needs at chargeback@shift4.com.
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