This article will explain Net Settlement of Chargebacks with AndDone.
How are chargebacks initiated?
In the context of AndDone, chargebacks are typically triggered by two main issues:
- Insufficient funds
- Inaccuracies in the provided bank account information
Insufficient funds occur when a customer attempts to complete a transaction without having enough balance to cover the payment and will trigger a chargeback event. Errors in bank account information such as mistakes in account numbers, incorrect routing numbers, or outdated details that no longer reflect current banking records will also trigger a chargeback event.
What do chargebacks normally look like?
Normally, when chargebacks occur, funds are returned through the NACHA network to the originating financial institution. After the payment has returned, or "charged back," AndDone notifies the Sub-Merchant and sends a payment link to recover these funds. In order to optimize the chargeback process, we are introducing Net Settlement of chargebacks.
What does Net Settlement of chargebacks mean in the context of AndDone?
Net Settlement refers to the method of settling funds between AndDone and Sub-Merchants for amounts owed to AndDone. As transactions process through payment networks, they settle and create a balance of funds that will be transferred to the Sub-Merchant's bank account. During the course of accepting payments, it likely that payments will return for reasons such as insufficient funds or incorrect account information. As payments return, it is the responsibility of the Sub-Merchant to return funds to AndDone, LLC - this is where net settlement becomes essential.
Net Settlement is a feature that identifies transactions that have returned, or amounts owed to AndDone and withholds that total amount against a future payout. 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 that detail settled transactions including the total amount that will be offset from the total payable amount. Chargeback reporting is also available to help you understand exactly which returned transactions have been withheld from a payout.
If you need assistance or have further questions, please refer to our self-service Knowledge Base!