What is a Chargeback
A chargeback happens when a patron or donor files a card dispute on a transaction, initiating the card dispute process. The owner of the card – your donor - initiates the dispute process, not Click & Pledge. They tell the bank/card issuer why they are filing the dispute. Because the bank/card issuer gives the cardholder provisional credit for the disputed amount, the disputed amount is withdrawn from the merchant account, along with the processing bank's chargeback fee.
The Chargeback Process for Stripe Payment Processor
For customers that process through Stripe, the following is the chargeback process.
When Stripe notifies our accounts team of a chargeback, the transaction details are provided to the organization. The organization can choose to take action to counter the dispute, or to take no action and accept it. No action results in loss of the disputed amount plus the bank chargeback fee. If the organization decides to counter the dispute, Click & Pledge Support has approximately two weeks to upload an organization's supporting documentation to Stripe, to explain why the disputed transaction should stand. Examples of supporting documentation are receipts, email correspondence between donor and organization, refund policies, event registration/attendance records, contracts or sponsorship agreements, and signatures from in-person transactions through our Swiper1 app.
Disputes have a 60 to 90-day review period. After the review, if the processing bank resolves the dispute in favor of the organization, the organization is credited for the disputed amount plus the bank chargeback processing fee. However, if the dispute is resolved in favor of the cardholder, the cardholder keeps the disputed amount and the affected organization loses both the disputed amount plus the bank chargeback fee.
Why chargebacks can happen
Donor doesn’t recognize the transaction -The donor actually made the gift, but something on their statement confused them, such as an unfamiliar descriptor or a recurring gift they forgot about. This is often called “friendly fraud.”
Recurring gift charged after it was canceled - Donor may have requested cancellation from an organization, but there may have been a lag in cancelling it within CONNECT platform.
Fraud – Donor's card has been lost or stolen and used without cardholder's knowledge/permission.
Prevention Tips
Make it easy for donors to contact you with transaction questions or refund requests by providing your organization's contact information. If requesting a refund is easy, donors may be less likely to dispute a charge.
Your statement descriptor - what your donors see on their statements – matters. Usually this will be your DBA – the name donors know you by. Although changes can be made by processing banks per their specifications, a clear, concise statement descriptor helps donors identify donations they made to your organization. Click & Pledge Support can research this for you and assist you with edits as needed.
For event registration or product purchases, you can use your Terms & Conditions area to list cancellation, return or refund policies.
For in-person transactions using our Swiper1 app, you can require signatures for all transactions or based on the transaction amount.