š³ What is a Chargeback?
A chargeback is when a tenantās credit card payment is reversed by their bank. This typically happens when the cardholder claims:
The charge was unauthorized
They didnāt receive the product/service
They were due a refund that wasnāt issued
The bank pulls the funds back from your account and opens a dispute.
ā ļø ACH Return vs. Credit Card Chargeback
Unlike credit card chargebacks, ACH returns canāt be disputed and are fully controlled by the tenantās bank. If a tenant's ACH payment is returned (e.g. due to insufficient funds or closed account), itās final.
š Common 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 from those 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 ā The Card was used without the cardholder's authorization
Goods or services were not as described ā Goods or services provided were materially different from they were described or agreed to
Goods or services not delivered ā Paid for an item or service that was never received or provided
Return credit not processed ā Item returned or canceled a service within a merchantās policy, and never received credit
A recurring billing was not stopped ā A subscription service continued to be billed after it was canceled
Incorrect amount ā 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 discretion of the issuing bank.
š How to Contest a Chargeback
If a tenant disputes a payment:
Youāll receive an email from RentRedi with the dispute details.
The disputed amount will be withdrawn from your payout balance.
You can submit evidence to contest the chargeback within 30 days.
š To submit evidence
On your RentRedi dashboard, click the three-line menu at the top left
Click Rent
Click Payment Accounts
Click Open dashboard on your payment account
Click Reports, then click Transaction Reports
Click Disputes
You will see the disputed payment having an "Action Required" status
Click the payment
Submit any relevant evidence that the charge was valid (i.e., Lease, utility charge, etc.)
RentRediās payment processor will review and submit the evidence youāve provided as part of the dispute process. Please note that the final decision rests solely with the issuing bank.
š§¾ 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 to 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 review process can take up to 60 days)
The dispute is closed -- If the issuing bank decides in favor of the merchant, funds and the chargeback fee are returned