What is a chargeback?

At a glance

How it works

The Moneris merchant agreement covers this. If a cardholder disputes a transaction, the payment to you may be reversed. You are responsible for all chargebacks. It also says Moneris and its bank members do not decide which sales are charged back. They do not start a chargeback. The Fiserv Canada terms describe a chargeback as a disputed card transaction returned by a card issuer.

1. The customer tells their bank they do not recognize or accept the charge.
2. The issuer sends a dispute through the card network to your processor.
3. Your processor tells you and, under the Fiserv Canada terms, debits the amount from your account.
4. You send proof, such as a receipt, a signed slip or a delivery record, before the deadline.
5. If your reply is on time and enough, your processor can present it back to the issuer. The issuer may accept it, reject it, or continue the dispute under card-network rules.

A Canadian example

A caterer in Québec City takes a $240 order by phone. Two weeks later, the customer tells their bank they never ordered it. The issuer reverses the $240. The processor takes $240 from the caterer's account. It adds any fee listed in the contract. The caterer sends the order form, the call record and the delivery proof in time. This is an example only, not a quote. No fee amount is used because fees are set in each agreement.

What is different in Canada and Québec

• Little differs between Québec and the rest of Canada. Chargebacks follow Visa and Mastercard rules. Those rules apply across the country.
• The Moneris agreement says you must answer a chargeback request within 7 calendar days. Moneris can give a different time in writing. Check the time in your own agreement.
• The Moneris chargeback section applies to credit card processing only. Interac Debit is a separate network with its own rules. Ask your processor how a debit dispute works.
• The Code of Conduct gives you a way to complain if you disagree with how your processor acted. A complaint must be acknowledged within five business days. It must be answered within 20 business days, or 30 for a card network.
• Leaving your processor does not end the risk. The Fiserv Canada terms say chargebacks tied to earlier sales still apply. That holds even if they arrive after you leave.

What it costs and where it shows on your statement

You lose the amount of the sale. Your agreement may also charge a chargeback fee. Moneris lists chargeback fees among the fees you may pay. Look on your statement for a line named chargeback, dispute or adjustment. Look for a debit from your account too. If chargebacks pile up, the Moneris terms say card brand fines may follow. They also say Moneris may end access to its authorization system for your locations. Fiserv Canada's terms say card-not-present orders carry a much higher chargeback risk.

Where CleverPays fits in this step

The cardholder's bank and the card network own the dispute. Your processor passes along the notice and your reply. CleverPays does not decide chargebacks and does not set Visa, Mastercard or Interac rules. CleverPays is operated by Groupe Heo Inc., an Agent of Fiserv Canada Ltd.

We can explain a chargeback notice. We can help you gather what you need, such as the receipt, the order record and the delivery proof. We can read a recent statement with you and show each fee line, including any chargeback fee. We will walk you through the deadline in your agreement and answer your questions in English and French. We cannot promise how a dispute will end.

Common mistakes

• Missing the deadline. Under the Moneris agreement, Moneris will not seek a reversal if you did not answer within 7 calendar days.
• Not keeping records. A signed slip, an order form or a delivery record backs up your reply.
• Treating every dispute as fraud. The Fiserv Canada terms list seven kinds, from approval problems to the quality of goods.

Related terms

• 3-D Secure: an extra online check that can shift some fraud liability.
• Payment processor: the company that passes the dispute to you.
• Payment gateway: the link for online sales, where disputes are more common.
• Virtual terminal: a screen for keying in phone orders, which carry higher dispute risk.
• Reason codes: the short codes that say why the issuer reversed the sale.
• Representment: your reply to the issuer, with proof.

Common questions