When a customer files a chargeback with their credit card issuer, it means that they are disputing a charge and asking for the funds to be returned to them. A customer might file a chargeback because they do not recognize a charge or did not authorize a payment. If the card has been compromised (i.e. fraud, lost or stolen), the card issuer may create the chargebacks on behalf of their customer (in those cases, the consumer may or may not be aware that the chargeback was issued). Consumers have up to 6 months to dispute any charge on a credit card. Either the full amount or a partial chargeback can be issued by the bank for the transaction. Partial chargebacks may be handled offline, depending upon the complexity of the partial chargeback.
A chargeback can not only be a disputed charge. It can also occur if a payment attempt is returned after a deposit to your district has happened (sometimes referred to as a late return). ACH return normally means it did not settle and the money was not able to be collected.
When a chargeback (or chargeback reversal) happens, the appropriate data is automatically pulled into Eleyo. The main Dashboard will reflect Chargebacks/Returns this Month under the Operations section. The system creates a transaction that is treated similar to a refund in that the original payment is no longer reflected as being applied to the account or enrollment. The disputed funds are debited and are indicated appropriately on financial reports for bank reconciliation. For chargeback reversals (where the chargeback has been fought and funds are returned to the district/program), the system creates a new payment, linked to all previous history and displaying correctly on financial reports.
If you have questions about a specific chargeback (including wanting to try to fight the chargeback to try to recover the funds), for fastest service, it is recommended to reply to the chargeback notification email received by the district. The team that handles chargebacks will provide recommendations on what documentation to provide to try to fight the chargeback (there is a short window to submit any documentation). Once that documentation is submitted to the banks involved, the issuing bank has up to 30 days to review and decide if the chargeback is going to be reversed or not. The team that handles chargebacks will make every effort on the program's behalf, however, there is no guarantee that the chargeback will go in the program's favor and that the funds will be returned. If there is a reversal, your program will be informed by email. If you do not know which staff receive the chargeback notifications, please contact the Support team for assistance.
Please note that if a chargeback for an ACH payment is made, there is not a way to attempt to fight it (it is automatically designated as an unauthorized charge). District staff would need to work with the payer to determine how the funds will be collected again.
What to do when a Chargeback Occurs
Your district/program can handle chargebacks in several ways depending on what module the payment was originally for. For a Course enrollment, if you have communicated with the consumer and the chargeback was issued in error, the enrollment will show the amount owed. The customer can go online and pay the amount due. You can also use a credit adjustment to write-off the amount that was disputed.
For Child Care payments, the system will automatically apply the amount of the chargeback to the balance owed on the account. You can use a credit adjustment to write off that amount if necessary.
Viewing Chargebacks from the system Dashboard
- Select the Dashboard icon from the top toolbar
- In the Operations section, select Chargebacks / Returns this Month
- When the list is displayed, select the desired one then select View Chargeback to view the details. On the left, the chargeback will indicate what reason code was provided by the issuing bank (i.e. fraud, etc).
Viewing a specific Chargeback from the Finance module
- Point to Finance
- Select Chargebacks / Returns
- Select the desired Chargeback and select Show Chargeback to view the details. On the left, the chargeback will indicate what reason code was provided by the card issuing bank (i.e. fraud, etc).
In some instances, districts will tag chargebacks with Collected or Resolved so that they can easily spot newer chargebacks that need to be looked into further. Staff can also add Notes and include that column in a view so they can see any follow up or recent updates staff may have done.
Viewing Chargebacks on Transactions Reports
Chargebacks are part of the financial reconciliation process and are included on Transactions Reports as well as Daily Transactions Reports. Below is an example of a chargeback line item on a Transactions Report.