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Net Settlement of Chargebacks Explained.

This article will explain Net Settlement of Chargebacks with AndDone.

What does Net Settlement of chargebacks mean in the context of AndDone? What will chargebacks look like? 

With Net Settlement of Chargebacks, or Chargeback Netting, AndDone identifies transactions that have been returned. These chargeback amounts are owed to AndDone and withheld against future Sub-Merchant payouts. This is done programmatically and requires no effort from the Sub-Merchant. This Net Settlement service is supported by daily reporting, including the Daily Settlement Report and Daily Chargeback Report. The Daily Settlement Report will show Chargebacks in the top line of the settlement report. Chargebacks will be labeled as "Chargeback" in column C and will show a negative amount under Column N which is the total amount that will be offset from the payout. The gross amount (subtotal amount plus fees) of the chargeback will be netted, or removed, from the payout. This is to say that the gross amount (including the technology fee) will be netted (removed) from future payouts. 

 

Why do Chargebacks occur?

In the context of AndDone, chargebacks are typically triggered by a few main issues:

  1. Insufficient funds - commonly associated with ACH and categorized as a chargeback. Insufficient funds occur and trigger a chargeback when a shopper attempts to complete a transaction without having enough balance to cover the payment. 
  2. Inaccuracies in bank account information - errors in bank account information such as mistakes in account number, incorrect routing numbers, or outdated details that no longer reflect current banking records will trigger a chargeback event. 
  3. Shopper disputes stemming from unrecognized Sub-Merchant statement descriptors - statement descriptors can be modified in the processor settings. Shopper disputes, while rarer than the other reasons, can occur but can be minimized by including a clear statement descriptor (click here to learn how to modify statement descriptors). 
  4. Return code R29 occurs when the shopper's bank account has a debit block, which restricts withdrawals to only those ACH Originator IDs that have been pre-authorized by the account holder. We recommend that shoppers contact their bank to update their list of approved Originating IDs to include both 0AD2424370 and 8263863381. 

If you need assistance or have any further questions, please click here to contact our support team.