What does the Chargeback Net Settlement Process look like with AndDone?

Chargeback Net Settlement Process Overview

The chargeback process begins when a shopper or financial institution initiates the chargeback, typically as a result of a shopper 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 Net Settlement Process 

1. 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 email of the Sub-Merchant associated with the returned payment. We recommend that the "Merchant Chargeback" and "Shopper Chargeback" notifications are enabled as they helps Sub-Merchants and Shoppers proactively communicate and resolve any issues associated with a disputed transaction. 
2. Next, the chargeback amount is promptly debited from an AndDone account. This is the act of AndDone covering the money to cover the chargeback amount while being processed for our customer; this is referred to as the "chargeback/refund amount."
3. At midnight (12:00 AM 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.
4. 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 Funds Transfer.
5. 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 your generated Settlement Reports to maintain an accurate understanding of your Virtual Account balances. This will allow you to anticipate and accurately reconcile payouts to your Bank via the virtual account balance.

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