Accounts Receivable: Managing Disputes

What to do when you get a chargeback

When a customer disputes a charge with their bank or credit card company, the financial institution notifies QuickBooks Payments.

QuickBooks checks for credits to the card when the chargeback is received. There are cases when QBO can’t match the chargeback to the credit:

• If the sales and refund amounts are different.
• If you issue a credit to the card after the chargeback has already been posted to your account. If this happens, send a copy of the credit issued to the card or proof that a refund was given, such as the front and back copy of the cashed refund check.
• If you issue a refund outside your QuickBooks payments. If this happens, send proof of that payment to QBO.

If you didn't give a credit, or QBO can't match the credit to the chargeback, the customer's card issuer credits the original charge amount to the cardholder. The credited amount, plus a $25 fee, is then debited to you, the merchant. This fee isn't a penalty. It's used to cover related costs.

When this happens QBO will email you about chargeback notices or retrieval requests. Don’t worry, the email will give you clear instructions for what to do next.

How to respond

Keep trying to resolve any issues your customer may have. Keep records of these interactions. If they feel you’ve resolved the situation, ask them to write you a letter stating that, and send it with your documents as described in Step 2. The customer should also contact their card issuing bank to cancel the chargeback.

If your customer tells you they canceled the chargeback, request a copy of the letter of retraction their bank provides. It should be on the bank’s letterhead and state the dispute has been dropped or resolved in the merchant’s favor. Send the letter to us as part of your supporting documentation.

Follow up on your rebuttal

Once you send your documents, it can take up to 90 days for the card issuer to reach a decision. QBO will send you a decision letter by email.

If the issuing bank decides you can't dispute the chargeback, you’ll receive a no-recourse notice that explains why.

The bank makes its decision based on the evidence presented by both you (the merchant) and your customer (the cardholder).

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