A chargeback is an action taken by a bank to reverse electronic payments. It involves reversing a payment and triggering a dispute resolution process. Typically chargebacks are used to reverse a payment when the payee claims a billing error, unauthorized credit card use, or failure to deliver a product or service.
Credit card disputes can be contested by submitting evidence that the charge was valid and in compliance with the landlord-tenant agreement. Bare in mind, the issuing bank has the final say in the outcome of a disputed transaction.
Unlike credit card disputes, ACH clawbacks cannot be disputed and are at the sole discretion of the issuing bank.
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Chargeback Reasons
The Federal Trade Commission and other regulatory bodies mandate a fair amount of protection to consumers using credit cards. Among other protections, cardholders have the right to accurate billing, protection from unauthorized charges, and the right to dispute charges for goods or services that are different than described. In addition to regulatory protections, different banks and credit card issuers may provide additional rights and/or protections.
Most often, card issuers will issue chargebacks for one of the following reasons:
Fraud or unauthorized use — Card used without cardholder's authorization
Goods or services were not as described — Goods or services provided were materially different than they were described or agreed to
Goods or services not delivered — Paid for an item or service that was never received or provided
Return credit not processed — Item returned or canceled a service within a merchant’s policy and never received credit
A recurring billing was not stopped — A subscription service continued to be billed after it was canceled
Incorrect amount — The amount charged was incorrect
Generally, chargeback abilities are limited to 120 days from the transaction date, but some institutions will consider disputes further back. The validity of a chargeback is at the sole desecration of the issuing bank.
Contesting a Chargeback
When a chargeback occurs, the RentRedi account owner will receive an email notification with the property, unit, tenant name, and charge amount being disputed. The funds being disputed will be withdrawn from the deposit account or from funds pending deposit in the payment account. These funds will only be returned if the dispute is won by the merchant.
It is important to submit evidence and contest the chargeback within 30 days of the chargeback date. To do so:
From your RentRedi Dashboard, click the gear ⚙️ icon
Click Settings
Click Feature Settings
Under Receive Payments, click the Modify button
Click Reports
Choose List Chargebacks
Click the ➕ next the the contested charge and click Take Action
Upload any relevant evidence that the charge was valid (ie: Lease, utility charges, etc)
ProPay will use that information to contest the dispute. The final decision will be at the sole discretion of the issuing bank.
Timelines and Expectations
The typical process of a credit card dispute is as follows
Payee contacts their bank and disputes a charge (generally limited to 120 days from the transaction date)
RentRedi will alert the account owner via email of the dispute within 1 business day
Funds are returned the payee and withdrawn from the merchant, plus a $15 chargeback fee
Merchant contests the dispute (must be done within 30 days of the dispute)
The issuing bank makes a final decision on the dispute after considering the evidence
The dispute is closed -- If the issuing bank decides in favor of the merchant, funds and the chargeback fee are returned