Read on below to learn how the chargeback process works with AndDone
Chargeback Process Overview
The chargeback process begins when a shopper or financial institution initiates the chargeback, typically as a result of a customer dispute or an administrative return identified by an involved financial institution. Once a chargeback is initiated, the payment processor is notified. This triggers a series of automated steps designed to ensure that both the customer and the sub-merchant are informed. The initiation of a chargeback sets off a chain reaction, leading to the subsequent actions outlined in this process, including the immediate notification to the sub-merchant involved
Chargeback Process
- Initiating a chargeback triggers an immediate notification, if enabled within the payments portal (click here to learn how to enable notifications), that will be sent to the Sub-Merchant associated with the returned payment. We recommend that this chargeback notification is enabled as it helps Sub-Merchants proactively communicate and resolve any issues associated with a disputed transaction.
- The chargeback amount is promptly debited from an AndDone account by Adyen. This is the act of AndDone covering the money to cover the chargeback amount while being processed for our customer; referred to as a chargeback float. This action is a critical part of the chargeback process, ensuring that funds are reallocated appropriately in response to the disputed transaction.
- At midnight (CST), chargeback amounts are reconciled with customers by deducting the chargeback amount and any associated fees from Sub-Merchant virtual accounts. This initiates a crucial process by transferring the chargeback amount from the Sub-Merchant's virtual account back to AndDone.
- This transfer affects the subsequent payout scheduled for 5:50 AM CST, as it directly affects the amount that will be available to the Sub-Merchant's bank account as it has debited from their virtual account prior to the payout. Payouts will be less the chargebacks initiated due to the debit executed during the transfer.
- The deducted chargeback amounts and fees are shown in the Daily Settlement Report as "Transfers." This report serves as a summary of all financial activities related to settled funds including chargebacks for the previous day, providing Sub-Merchants with the total amounts associated to processing chargebacks. Therefore, a best practice for Sub-Merchants is to regularly review their Settlement Reports to maintain an accurate understanding of their virtual account balances to anticipate and accurately reconcile payouts to Bank with the virtual account balance.
If you need assistance or have further questions, please contact our support team.