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Chargebacks Timelines

The diagrams below illustrate various phases in the chargebacks process.

Chargeback Open​

Merchant Perspective:​

  • Merchants subscribed to notifications will receive an email when a chargeback is opened for Plan ID xxx.
  • A reminder email will be sent two days before the deadline to submit evidence.
  • Merchants can view the chargeback details, including the dispute ID, in the chargebacks section of the Hub portal.

Shopper Perspective:​

  • Shoppers receive an email notification when a chargeback dispute is opened for their plan.
  • Shoppers can view the chargeback status in the shopper portal under the relevant installment and plan.
  • Shoppers cannot update their card while the plan is under dispute.

Transaction Flow:​

  • The plan associated with the chargeback will be paused, preventing further authorizations or charges until a resolution is received from the processor.
  • The plan status will be marked as "In Dispute".
  • Refunds cannot be processed for transactions under chargeback.
  • Updating the card details will not return the plan to "In Progress" status.

Money Flow:​

  • When a shopper initiates a chargeback, the corresponding chargeback amount is temporarily withdrawn from the merchant’s account.
  • A reserve amount, including the outstanding balance and any past charges at risk of chargeback (charges captured within the last 120 days), is collected into a reserve.
  • The Settlement Report will include:
    • "Chargeback": The corresponding chargeback amount.
    • "Chargeback Reserve": The reserve amount collected.
chargeback open

Submitting Evidence and Disputing the Chargeback​

Merchant Perspective:​

  • Merchants must upload all necessary evidence before the due date in the chargebacks section of the portal if they wish to dispute the chargeback.

Shopper Perspective:​

  • No impact.

Transaction Flow:​

  • The chargeback status will remain "Open" or change to "Pending", depending on the processor’s response.

Money Flow:​

  • No impact at this stage.
merchant process

Chargeback Resolutions​

Resolution Won​

1. Won with Additional Chargebacks "Pending Decision"​

Merchant Perspective:​

  • Merchants receive an email confirming the chargeback was won.
  • The shopper is given an option to:
    • Update their card within six days to resume the plan.
    • Pay the full balance.
  • Merchants receive an email notification if the shopper updates their card and the plan resumes.

Shopper Perspective:​

  • Shoppers receive an email informing them that they lost the chargeback and can either update their card to continue or pay the full amount.

Transaction Flow:​

  • The plan remains "In Dispute".
  • If the shopper updates their card successfully, the plan status changes to "In Progress", but "In Dispute" remains due to unresolved chargebacks.

Money Flow:​

  • The previously collected chargeback amount is returned to the merchant if the chargeback is won.
  • The system awaits the resolution of additional chargebacks.
  • If all additional chargebacks are won, the previously collected chargeback amounts are returned, and the outstanding balance is captured.(depends on the shopper's decision).
  • Settlement Report includes:
    • "ChargebackReverse": Refunded chargeback amount.
    • "ChargebackReserve" (+): The returned outstanding balance amount.

2. Won with No Additional Chargebacks "Pending Decision"​

Merchant Perspective:​

  • Merchants receive an email confirming the chargeback was won.
  • Shoppers are given the option to update their card within six days or pay in full.
  • Merchants receive an email if:
    • The shopper updates their card and the plan resumes.
    • The shopper pays in full.
    • The plan is fully captured if the shopper takes no action.

Shopper Perspective:​

  • Shoppers receive an email stating they lost the chargeback and can update their card or pay in full.
  • If they take no action within six days, they receive another email stating the plan has been fully captured.

Transaction Flow:​

  • If the shopper updates their card, the plan resumes "In Progress."
  • If the shopper does nothing, the plan is fully captured and marked "Cleared."

Money Flow:​

  • If the shopper updates their card, the plan resumes "In Progress."
  • If the shopper does nothing, the plan is fully captured and marked "Cleared."
chargeback won

Resolution Lost​

1. Lost with Additional Chargebacks "Pending Decision"​

Merchant Perspective:​

  • Merchants receive an email notifying them of the lost chargeback.
  • Shoppers have six days to update their card or pay in full.
  • Merchants receive an email if:
    • The shopper updates their card and the plan resumes.
    • The plan is canceled if the shopper takes no action.

Shopper Perspective:​

  • Shoppers receive an email confirming they won the chargeback and can update their card or pay in full within six days.

Transaction Flow:​

  • If the shopper does not update their card or pay, the plan is canceled.
  • If the shopper updates their card, the plan resumes "In Progress."

Money Flow:​

  • If any chargeback is lost, the plan is canceled regardless of pending chargebacks.
  • Lost chargeback amounts are not returned.
  • Settlement Report includes:
    • "ChargebackReverse": Refunded amount for won chargebacks.
    • "ChargebackRefund" (-): Amount due to chargeback loss.
    • "ChargebackReserve" (+): Returned outstanding balance.

2. Lost with No Additional Chargebacks "Pending Decision"​

Merchant Perspective:​

  • Merchants receive an email that the chargeback was lost.
  • Shoppers have six days to update their card or pay in full.
  • Merchants receive an email if:
    • The shopper updates their card and the plan resumes.
    • The plan is canceled if no action is taken.

Shopper Perspective:​

  • Shoppers receive an email confirming they won the chargeback and must act within six days.
  • If no action is taken, the plan is canceled.

Transaction Flow:​

  • If the shopper updates their card, the plan resumes "In Progress."
  • If the shopper pays in full, the plan status is "Cleared."
  • If the shopper does nothing, the plan is canceled.

Money Flow:​

  • Lost chargeback amounts are not returned.

  • The remaining installments are canceled.

  • Reserve amounts are returned after 120 days unless another chargeback is initiated.

  • Settlement Report includes:

    • "ChargebackRefund" (-): Amount due to chargeback loss.
    • "ChargebackReserve" (+): Returned outstanding balance.
    chargeback lost

Chargeback Manually Marked as Lost​

  • If a chargeback remains open or pending for more than 140 days, Splitit manually marks it as lost, as it has either expired on the gateway or has entered a second cycle, which is considered lost.

Second-Cycle Chargebacks​

  • If a card issuer disagrees with the initial dispute outcome, they may initiate a second-cycle chargeback.
  • These chargebacks are not handled via the usual gateway process and require a separate dispute filing.
  • The cost starts at $500 per chargeback.

Chargeback Reversal by Shopper​

  • If a shopper reverses a chargeback, Splitit receives a notification from the payment gateway confirming a win.

Chargeback Process and Refunds​

  • A refund cannot be processed through the standard system for a transaction with an open chargeback or a chargeback that was resolved as won or lost. If a merchant wishes to refund a shopper in such cases, they must do so through a direct transfer.