A card chargeback starts when a card payment is disputed by the cardholder who contests the payment with the bank. A card transaction may be subject to a chargeback for up to 13 months from the sale date.
A card chargeback results in:
- For the cardholder: a refund of the total or partial amount of the original transaction
- For the merchant: a debit of the chargeback amount from the payment account that received the original transaction
- For you: a debit of the Lemonway chargeback fee amount from your merchant payment account (SC)
Your customers' chargebacks and associated costs are therefore all and without exception at your expense, as stated in your contract.
Main reasons for card chargebacks
We’ve listed the main reasons for card chargebacks. They’re also automatically included in the notes section on the card chargeback transactions in your dashboard.
- Unidentified or unknown transaction
- Disputed transaction/cardholder did not carry out the transaction
- Fraud: stolen card or transaction made without the cardholder
- Services not provided or goods not received
- Defective goods complaint
- Cancellation of recurring payment
- Authorisation denied
The relevance of the chargeback reasons depends on the cardholder’s bank. Lemonway has no additional information and is unable to contact the cardholder’s bank if a return code appears to be incorrect or unclear. You need to contact your client if you wish to know more about the reasons of this disputed payment.
Identify a card chargeback in the dashboard
- From the Dashboard, click Transactions.
- Click All.
- Set the following filters:
- Method: Card
- Type: Outgoing
- Status: Completed
- Comment: Chargeback
A card chargeback results in 2, or even 3, transactions on your dashboard:
- The return transaction in the customer (initial vendor) payment account to which the original transaction was credited, showing the reason for the return in the notes field (as reported to Lemonway by the debtor's bank) and the ID of the original transaction. In the event that the balance of the relevant customer (initial vendor) payment account is insufficient for the return transaction to be debited, Lemonway automatically performs a P2P transfer from your merchant payment account (SC) to the relevant customer (initial buyer) payment account for the shortfall before proceeding with the Return transaction.
- The transaction corresponding to the return fee charged by Lemonway (P2P from your merchant payment account (SC) to the Lemonway payment account for the amount specified in your contract).
Dispute a chargeback
If you believe that a chargeback is not legitimate, you have the right to contest it for up to 8 calendar days following the date of the chargeback.
To contest a card chargeback, 👉 contact us as soon as possible, providing us with as much information as you can verify the transaction, and delivery of the product or service:
- The ID of the relevant transaction
- Invoice, interaction history, order confirmation/notification, delivery note, proof of receipt of the package
- An explanatory letter summarising the facts (purchase worth XX EUR made on a particular date) and detailing the reasons for the dispute
The information received is then forwarded to the acquiring bank by Lemonway. A formal dispute procedure then follows between the acquiring bank and the cardholder's bank resulting in an agreement (cancellation or upholding of the chargeback) or a disagreement (submission to the Interbank Arbitration Committee for a final decision). The time limit for resolving interbank disputes is not standard and can vary greatly (from a few weeks to several months) depending on the bank and case.
If a chargeback is canceled (also called a representation of the chargeback amount) at the end of the process, the amount of the chargeback transaction is once again debited from the cardholder and you are automatically credited (new card Money-In with a Credit Chargeback Transaction mention in the payment account of the original transaction, and with the ID of the original transaction).
You will not receive any notification if the chargeback is not canceled after the dispute procedure.
Understanding who issued the chargeback
When a client decides to oppose a payment that was made with their credit card, we call that a chargeback.
When a customer disputes a transaction and requests a chargeback, they contact their bank or credit card issuer and provide reasons for the dispute: unauthorized transactions, non-receipt of goods or services, or billing errors... The issuing bank then investigates the dispute and, if they find it valid, initiates the chargeback process. The chargeback results in the credit card being refunded and the funds that you received for the payment being returned to the customer. The issuing bank contacts us to enable that process.
👉 NOTE: Lemonway never generates chargebacks, your clients do.