Help Guide

Understanding Chargebacks

The difference between a credit and a CB

A credit is the result of a donor requesting that his donation be refunded. For example, duplicate or multiple charges, or an incorrect amount.

A chargeback (CB) is result of a donor who calls his card issuer to file a dispute. The card issuer is the initiator of the CB process while GiveDirect and the charity are the recipients of a CB.

A retrieval request is the result of a donor asking for clarification of an item on his statement before a dispute is submitted.

CB Procedures

When GiveDirect is notified of a CB, a transaction will be entered into the Charity's Control Panel. The charity will receive an email notification of the CB. Upon receipt of the notification, the charity should contact the donor to determine if there was a misunderstanding, i.e. the donor did not recognize the billing descriptor on his card statement, or the donation was made by one card holder without notifying the other card holder(s) . If the CB was requested due to a misunderstanding, then the donor must call his credit card issuer to request a CB reversal.

Since donations are voluntary and the donor usually does not receive services in exchange for his or her donation, it is almost impossible to rebut a CB. However, if a payment was made in exchange for a service, such as a event ticket, auction item, or payment for other services, the charity must provide proof that such service was received and/or used by the donor.

If the charity can provide such proof and if the documentation is accepted by the credit card issuer as valid proof/documentation, then a CB reversal will be submitted by the card issuer. Acceptance of documentation of valid proof of service or receipt of merchandise is totally dependent on the policies and procedures of the card issuer. The card issuer's judgement is final.

Arbitration

If a disputed transaction is $5,000.00 or more and the charity wishes to rebut the CB, the credit card company will automatically proceed with arbitration. In the case of arbitration, if the charity loses, the credit card company will assess an arbitration fee which could be as high as $5,000.00. The charity will be liable for any arbitration fee charged to GiveDirect. Arbitration fees are not disclosed beforehand and once assessed the fee is final with no recourse available to either the charity or GiveDirect.

Financial Responsibility

Regardless of whether a transaction is intentional or not (i.e., fraudulent), the charity is responsible for paying credit card processing fees. The CB fee charged to GiveDirect is not passed along to the charity.

Distributions are made in good faith that your donor(s) will not dispute his/her transaction, which results in a chargeback or credit. If a transaction is disputed, and amounts are refunded to the donor after distribution to the charity is made, the organization is responsible to reimburse GiveDirect for such amount(s). If the refunded amount exceeds the next month's transactions, the deficit will be debited from the charity's bank account on the next regular distribution date.

A CB Reversal can not be recorded unless the reversal is processed by the card issuer and funds are received back into our bank account. Once funds are returned a distribution will be made to the charity on the next regularly scheduled deposit date.

Time Line

The Charity will receive approximately three weeks to respond to a CB and approximately one week to respond to a retrieval request.

It may take a credit card company 4 to 6 weeks to accept or reject a rebuttal.

General Policies

As a general rule, if a dispute was submitted due to a duplicate transaction or in the case a donor who claims he cancelled a recurring donation, GiveDirect will automatically accept the CB without seeking the charity's input.

If the CB is for other reasons, i.e., claims that the donor did not receive requested merchandise, or merchandise was defective, the charity will be notified and allowed the opportunity to provide documentation to disprove the donor's claim. It is important that a rebuttal is submitted in a timely manner. Once the dispute period passes, all rebuttal rights are suspended by the credit card issuer.

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