What is a Chargeback?
A chargeback is when a tenant’s credit card payment is reversed by their bank. This typically happens when the cardholder claims:
The charge was unauthorized
They didn’t receive the product/service
They were due a refund that wasn’t issued
The bank pulls the funds back from your account and opens a dispute.
ACH Returns vs. Credit Card Chargebacks
ACH returns and credit card chargebacks follow different payment network rules.
Credit card payments can be disputed through the card networks, such as Visa or Mastercard. ACH payments, however, do not have a chargeback process. Instead, ACH returns are processed by the receiving bank according to the Nacha Operating Rules, which govern the ACH Network.
If a tenant's ACH payment is returned, such as for insufficient funds or a closed bank account, neither RentRedi nor our payment processor can dispute or reverse the return. Once the bank processes a valid ACH return under the Nacha Operating Rules, the return is final.
If payment is still owed, the tenant will need to submit a new payment or make alternative payment arrangements with the landlord.
Common Credit Card Chargeback Reasons
The Federal Trade Commission (FTC) 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 — The Card was used without the cardholder's authorization
Goods or services were not as described — Goods or services provided were materially different from how 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
Important: 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.
What Happens When a Tenant Files a Chargeback?
If a tenant files a chargeback for a credit card payment made through RentRedi, here's what happens:
You’ll 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.
How to File a Dispute and Submit Evidence
From your RentRedi dashboard, type Payment Accounts into the search bar.
Select Payment Accounts from the search results.
On the Payment Accounts page, click the payment account associated with the disputed transaction.
Go to Reports ➜ Transaction Reports.
Click the Disputes tab.
Click the Disputed Payment with an Action Required status.
Submit evidence showing that the payment was valid, such as a lease agreement, utility bill, or other supporting documentation.
What happens next?
RentRedi’s payment processor, Stripe, will review your evidence and submit it to the issuing bank as part of the dispute process. Please note that the issuing bank makes the final decision on the dispute.
Timelines and Expectations
The typical credit card dispute process is as follows:
The payee disputes the charge. They contact their bank to dispute a transaction, generally within 120 days of the transaction date.
RentRedi notifies the account owner. You'll receive an email about the dispute within 1 business day.
The disputed funds are withdrawn. The disputed amount is returned to the payee, and the merchant is charged a $15 chargeback fee.
The merchant submits evidence. You can contest the dispute by submitting supporting evidence within 30 days of the dispute.
The issuing bank reviews the evidence. The bank makes the final decision, and the review process can take up to 60 days.
The dispute is closed. If the issuing bank rules in your favor, the disputed funds and chargeback fee are returned to you.
Note: If you're still processing payments through ProPay or the chargeback is related to a ProPay transaction, please refer to the steps outlined in this Help Article.
Need help? 💬
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