At SumUp we do everything in our power to minimize fraud, and in turn, minimize the chances of chargebacks. In case you still receive a retrieval request, chargeback or a fraud report, this article will help you understand the process.
In this article:
What is a retrieval request?
A retrieval request occurs when your customer or your customer’s bank requests more information about a transaction that appears on the customer’s card statement. Often this can occur when a customer doesn’t recognize a charge on their card and contacts their bank.
Will any funds be deducted from my bank account as a result of a retrieval request?
No, a retrieval request is just a request for information, so you won’t be charged for the amount of the transaction associated with the retrieval request. However, failure to provide SumUp with the requested details and documents on the transaction may result in a chargeback.
What should I do if I receive a retrieval request?
You will be notified of a retrieval request through the email registered to your SumUp and you’ll be asked to provide SumUp with all relevant information and documents that will need to be forwarded to the customer’s bank. You can find the requirements for the requested documents here. If you can, we recommend contacting your customer to solve the issue and ask them to call their bank to stop any potential chargebacks.
What is a chargeback?
When a card transaction is disputed (either at the request of the cardholder or by the cardholder’s bank), you may receive a chargeback, also referred to as a payment dispute. Ideally, customers would only dispute a payment if their account was charged with an unauthorized transaction. However, chargebacks are sometimes issued in error.
What are the reasons for a chargeback?
Reasons for chargebacks often include:
- Merchandise is damaged or defective when received
- Merchandise is not as described (Customer ordered a hat, but received a shirt)
- A cardholder disputes the quality or receipt of merchandise
- Merchandise or Services were not received or completed
- Merchandise or Service was canceled before the cardholder was to receive but were still charged
- Cardholder returns the merchandise but has not received a refund
- Cardholder disputes a transaction as a fraudulent use of their card
- Cardholder doesn’t recognize the charge on their bank statement
- The amount charged was incorrect
- The cardholder was charged twice for the same payment
- The cardholder paid by other means (cash, check, other card payment) and was charged on their card in error
- The merchant did not fulfill a retrieval request and the request turned into a chargeback
Chargeback Rules and Regulations
Chargeback rules and regulations are governed by the card network associations (Visa, MasterCard, American Express, and Discover). Chargeback rules govern every phase of the chargeback process; time limits, reasons and reason codes, fines and fees differ per card scheme.
Chargeback rules also incorporate chargeback ratios, or the percentage of chargebacks a merchant receives in relation to total sales. Merchants who breach these thresholds are subject to penalties from both the card network and the acquirer. If you receive a chargeback, respond and provide all the information you can to help refute it.
What happens during a chargeback?
A chargeback happens when a customer contacts their card issuer to dispute a transaction. The chargeback is passed through the applicable payment network to the merchant, and then your SumUp account will be charged once the chargeback is received. A fee of $10.00 will be applied additionally to cover the expenses incurred through the chargeback. Please be aware that this fee will be charged by the payments provider and is not caused by SumUp.
The chargeback includes a “respond by'' date. Because the payment networks only allow a limited amount of time to respond to (and dispute) a chargeback, it’s critical that you respond to any emails within the requested time frame and provide the necessary information to support your objection to the dispute.
By responding in a timely manner, SumUp is better able to support you while disputing the chargeback and attempting to recover the charged amount from the cardholder’s bank. Traditionally it takes between 45-90 days to resolve a chargeback issue but can take longer.
What should I do if I receive a chargeback?
If you receive a chargeback notification from our Chargeback Support Team, thoroughly read the email that provides an outline of the dispute reason and a requested list of supporting documentation or evidence that may support your rebuttal against the chargeback.
If we do not receive a response from you, SumUp will provide the information on your behalf. We cannot guarantee any recovery recourse after the objection has been submitted.
If you are able to resolve the chargeback issue directly, you can request the customer to contact their bank and cancel the chargeback. Once the customer cancels the dispute, the issuer will send them a confirmation letter or email. Request a copy of this letter from your customer and send it to our chargeback support team. The issuer will include information in their report regarding the customer’s dispute withdrawal.
If you agree the customer is owed a refund, apply the refund back to the card the customer used for payment and notify the SumUp Chargeback Support Team that a refund has been issued to satisfy the chargeback. Do not issue a refund in any payment form except for the card originally used for payment.
Does SumUp have chargeback fees?
A dispute fee is a fee your card processing company may charge you, in addition to the reversed funds, if it finds you at fault for a chargeback. SumUp does not charge you an additional fee for a dispute. Most other payment processors charge a nonrefundable fee ranging from $10 to $25. SumUp only charges the normal processing fee as with any other transaction.
Why are the disputed funds being deducted?
When your customer’s card-issuing bank notifies SumUp about the payment dispute, they automatically debit the disputed amount from your SumUp account. SumUp then deducts from your next payout to cover the disputed funds and informs you of the dispute right away.
The disputed amount will be held from your account for the duration of the dispute process. If we receive notice that the dispute has been resolved in your favor, we will then release the funds back to you. Reimbursement occurs within 15 days from when we receive the dispute acceptance notification.
If the case is resolved in favor of the customer, the held funds will then be returned to them. If you do not have adequate coverage of funds for the disputed transaction, we will request a wire transfer.
SumUp stands with its merchants throughout the chargeback process. In order to increase the chances of winning a chargeback dispute, it’s important that merchants remain cooperative and provide the information that we request.
You can find more tips on how to prevent chargebacks here.
What is a fraud report?
A fraud report, or fraud alert, is a notification for specific transactions, such as confirmed fraud and customer disputes, that occurs when your customer’s bank notifies SumUp. Typically, the customer will report to their bank directly about suspicious activity surrounding the payments before attempting to contact your business.
What should I do if I receive a fraud report?
SumUp will notify you upon receiving a fraud report and provide further instructions. If you can, we recommend contacting your customer to solve the issue and ask them to call their bank to stop any potential chargebacks.
How can I prevent an alert or chargeback?
While there are no tactics that guarantee comprehensive prevention in every situation, following the below guidelines can help mitigate an alert or chargeback from being received.
- Make your policies clear in your Terms & Conditions, especially regarding refunds and cancellations.
- Issue order fulfillment information, preferably in a follow-up email that gets sent within one business day after a purchase is made.
- Look for suspicious transactions–if the customer is hesitant to give out personal information on a rushed order, such as a zip code or correct address spelling, this could be a sign of potential fraud.
- Provide high-quality customer service at all times.