Lightspeed has no involvement in the chargeback decision-making process or outcome. Decisions are made by the customer's bank or card issuer and considered final. It is your responsibility to manage your chargebacks.

A chargeback occurs when a customer disputes a transaction with their bank for various reasons, leading to the reversal of the credit card transaction. This process is designed to protect customers from fraud or unauthorized transactions. Customers tend to escalate in this way when:

• Their card was stolen or they didn’t authorize the purchase.
• They need to fix a mistake like a duplicate charge.
• They’re unsure how to contact you to request a refund.

Once a chargeback has been filed, you cannot issue a refund directly. The customer’s bank will put the disputed funds on hold until the case has been resolved.

As a merchant, you can choose to either dispute the chargeback by filing evidence with the cardholder’s bank, or accept the chargeback and release the funds to the cardholder. Chargebacks will appear in your transactions report along with the non-refundable chargeback fee.

Types of chargebacks

Fraudulent or unrecognized transactions

Fraudulent or Unrecognized chargebacks can happen when the cardholder didn’t authorize the transaction (stolen card) or they don't recognize the business name or transaction details on their statement. These are the most common types of chargebacks.

To dispute these types of chargebacks, you'll need to submit evidence proving the purchase was made by the cardholder and reasonable steps were taken to verify their identity, like:

• Sales receipts (date, time, amount, items purchased).
• Shipping/tracking information and proof of delivery or pickup by the cardholder.
• Identity verification steps.

Duplicate transactions

Duplicate chargebacks can happen when the customer believes they were charged more than once for the same product or service.

To dispute this type of chargeback, you'll need to submit evidence proving each charge was valid and the customer received separate products or services for each charge, like:

• Sales receipts showing unique order numbers or identifiers.
• Explanation of how the charges differ.

If a duplicate transaction does happen by accident, refund the duplicate charge right away and contact your customer to prevent a chargeback.

Canceled merchandise or service

Canceled merchandise or service chargebacks can happen when a customer is charged for an order or service they believe they canceled.

To dispute this type of chargeback, you'll need to submit evidence proving the service was active and the charge complies with your cancellation policy, like:

• Sales receipts (date, time, amount, items purchased).
• Cancellation policy and communication of terms.
• Cancellation records.
• Continuation of service.
• Shipping records and communication of upcoming shipments/renewals.

Products not received

Products not received chargebacks can happen when a customer claims they paid for an item but never received it.

To dispute this type of chargeback, you'll need to submit evidence proving the product or service was provided (or attempted) in the agreed upon timeframe, like:

• Sales receipts (date, time, amount, items purchased).
• Communicated delivery date.
• Shipping/tracking information and proof of delivery or attempted delivery.

Product unacceptable

Product unacceptable chargebacks can happen when a customer claims a product was defective, damaged, or not as described.

To dispute this type of chargeback, you'll need to submit evidence proving the product or service matched your description and you’ve made reasonable efforts to address concerns, like:

• Sales receipts (date, time, amount, items purchased).
• Product description or service agreement.
• Communication with the customer.
• Condition upon delivery.
• Provided replacement product or service, if applicable.
• Quality control measures.

Credit not processed

Credit not processed chargebacks can happen when a customer expects a refund but claims they never received it.

To dispute this type of chargeback, you'll need to submit evidence proving the customer was aware of the refund policy and why the filing isn’t valid, like:

• Sales receipts (date, time, amount, items purchased).
• Refund policy and communication of terms.
• Proof of delivery or issued refunds, if applicable.
• Condition upon return, if applicable.

General disputes

General disputes are chargebacks that don’t fit into the other categories.

To dispute this type of chargeback, you'll need to submit evidence proving you delivered the product or service, like any of the applicable information listed above (sales receipts, terms and policies, etc.).

Preventing chargebacks best practices

Chargebacks are an unavoidable part of accepting credit cards, but there are some proactive measures you can take to reduce your exposure to fraud and disputes.

A pattern of consistent chargebacks can signal risky behavior to banks and payment processors, potentially resulting in you paying higher processing fees or certain credit card companies disqualifying you from processing credit cards altogether.

Use secure payment methods

For online payments, ensure all transactions are processed through the secure payment gateway with fraud detection features like address verification and CVV checks.

Avoid manually entering card details unless absolutely necessary. Manually entering card details shifts the liability for fraud to your business.

Watch for unusual patterns and review suspicious high-value orders

Keep an eye out for suspicious behaviors like:

• Multiple orders from the same account in a short amount of time.
• Different cards used by one customer.
• Unusual order size.
• Multiple failed payment attempts or multiple instances of different incorrect expiration dates or CVV numbers.

Pay extra attention to large or high-value orders. Verify that the shipping address matches the billing address and if there is a mismatch, verify the cardholder’s identity to confirm the order is legitimate.

Trust your instincts if something feels off with an order and investigate before completing the order.

Accurately describe products and services

Avoid misunderstandings and proactively prevent disputes by keeping your information accurate and updated.

• Provide accurate product descriptions and service details, including features, specifications, care recommendations, and limitations.
• Ensure product imagery is accurate, up to date, and as detailed as possible to set appropriate expectations.
• Clearly differentiate between similar and similarly priced products in descriptions and on receipts to avoid valid charges being mistaken as erroneous or duplicate.
• Ship products as soon as possible after payment and pack products in protective packaging to avoid damage in transit.

Be transparent about fees and policies

Although not a guarantee, if you're transparent with your policies and customers are aware of them beforehand, they may be less likely to file a chargeback.

• Ensure your refund, return, and cancellation policies are easy for customers to find and understand. Consider including terms and conditions on your receipts and on your website.
• Be clear about any taxes, shipping or delivery fees, or other charges associated with the transaction.
• Clearly communicate subscription details and send reminders for recurring charges. Consider adding information about cancellation cutoffs or links to the terms and conditions.
• Allow customers to cancel their order if they don’t agree to the terms.

Communicate proactively and promptly with customers

If resolving an issue with you is easier than initiating a chargeback, customers will be less likely to file a dispute. Make sure your communication is clear and proactive:

• Keep receipt templates updated and email receipts to customers upon payment.
• Send confirmations for online orders that include your business name, date, amount, items, and shipping/delivery information when available. If there’s a shipping delay, let your customer know.
• Make your contact information easy to find and post it on your website and receipts.
• Offer customer support through multiple channels like email, phone, or chat and respond quickly to customer complaints.
• Ensure the business name that appears on customers’ statements is one they’ll associate with your business, so they recognize charges on their credit card statements. To update the business name that shows on customer statements, contact Payments Support.

Track shipments

Be clear about shipping or delivery processes and clearly communicate when a customer should expect their order to ship.

Use reputable shipping carriers that provide tracking information and share that tracking information with the customer. For high-value items, require a signature upon delivery.

Preparing for chargebacks best practices

Maintain detailed records

Keeping detailed records will help you resolve issues faster and provide documentation when challenging chargebacks.

• Keep detailed, organized records of receipts and transaction records.
• Provide proof of shipping and delivery, such as tracking numbers or signatures of receipt.
• Keep written records of customer communication and cancelations.

Train your staff

Training your staff is an important part of providing good customer service and reducing the risk of customer dissatisfaction and fraud.

• Ensure your staff know how to handle secure transactions and spot suspicious activity.
• Train staff on company policies and how to communicate them to customers.
• Make sure staff know how to handle customer complaints and understand your procedures for resolving issues.

Navigating the chargeback process

A chargeback process typically involves the following steps:

1. Customer files a dispute regarding the charge with their bank and the bank opens a chargeback with the merchant’s bank.
2. Merchant’s bank debits their account for the disputed amount and the non-refundable chargeback fee. Disputed funds are set aside to be awarded to the winner of the dispute.

3. Merchant’s bank notifies the Lightspeed Payments team of the chargeback and the team emails the merchant to notify them of the chargeback.

   

4. Merchant decides to accept or challenge the chargeback:

   • Accept: Customer is refunded the disputed amount and the case is closed.
   • Challenge: Merchant supplies evidence through the Financial services > Disputes tab in eCom (C-Series) to prove the charge is legitimate and the chargeback unjustified.

   If you choose to challenge a chargeback, evidence must be submitted by the given deadline or you will automatically forfeit the dispute.

5. Lightspeed Payments team shares the response and evidence with the merchant’s bank.
6. Merchant’s bank shares the response and evidence with the customer’s bank.
7. Merchant’s bank reviews the chargeback dispute and all supplied evidence to determine whether the customer or merchant won the dispute. Funds are awarded to whoever wins the dispute.

Receiving and managing chargebacks

Managing chargebacks on the Financial services page is available to merchants with Lightspeed Payments and users with access to Lightspeed Payments in the account.

If a chargeback has been filed against your business, you'll receive an email alert from the Lightspeed Payments team with details and deadline information. You can navigate to the Financial services page in eCom (C-Series) to accept or dispute the chargeback.

Keeping your contact information updated in eCom (C-Series) and checking your email regularly is essential, as chargeback alerts will be sent to the email address on file.

You will be notified of any chargebacks filed against you by email and on the Financial services page in eCom (C-Series). You can also view the status of past and current chargebacks on the Disputes tab.

1. Log in to eCom (C-Series) with your Lightspeed credentials.
2. Navigate to Financial Services.

3. Click the Disputes tab or View disputes in the notification on the Overview page.

   

Once a chargeback has been filed, you cannot issue a refund directly.

Viewing dispute details

From the Disputes tab, you can view the status of all current and past chargeback disputes, including the response deadline, current status, reason for the dispute, and total amount of the dispute.

You can search for specific transactions by filtering by status, organizing by date, or by searching for a transaction.

To view the chargeback amount, fee, response deadline, and other details of a specific dispute, click the Response deadline date (blue hyperlink) to open the Dispute details page. You can also accept or challenge the dispute from this page.

Challenging a chargeback

If the transaction is legitimate, you can challenge the chargeback. You must provide evidence supporting the transaction's legitimacy, like:

• Transaction details such as the payment amount, entry method, the cardholder's name, or the time and date of the transaction.
• Proof the transaction in dispute has already been refunded.
• Proof your policies and terms and conditions were conveyed to the customer or are listed clearly on the customer’s receipt.

To challenge a chargeback:

1. Navigate to the Financial services page > Disputes tab in eCom (C-Series).

   

   You can also open the chargeback alert email from the Lightspeed Payments team and click Respond to dispute to access chargeback information on the Financial services page in eCom (C-Series).

   Always verify information in an email, like the sender address, details in the email, links, and landing page URL addresses before entering information like login details.

2. Locate the dispute and click its Response deadline date (blue hyperlink) to view the dispute details.

3. Click Challenge dispute.

   

4. In the Challenge reason box, explain why you believe the dispute is invalid. In the Upload evidence section, drag and drop or select any relevant evidence you have and use the dropdowns to update the evidence type as needed.

   

   Details cannot be added or changed once submitted, so make sure you include all relevant details before finalizing your submission. Evidence must be submitted by the given deadline or you will automatically forfeit the dispute.

5. When all supporting documents have been uploaded, click Submit evidence. The evidence will be submitted to the appropriate parties on your behalf.

   Banks may take up to 3 months to review and return a decision on the dispute.

If the evidence proves the legitimacy of the charge, the chargeback will be overturned and funds will be returned to you. You’ll receive another email from Lightspeed with the details.

Resolving a chargeback with your customer

In the event you’ve been in contact with your customer and they’ve agreed to cancel the chargeback through their bank, it’s recommended to:

1. Request they provide a withdrawal letter from their credit card company confirming cancellation.
2. Follow the steps above to challenge the chargeback through the Financial services > Disputes tab in eCom (C-Series).
3. Submit the withdrawal intent as evidence, including the withdrawal letter if possible.

If a dispute is successfully withdrawn or the transaction determined legitimate, the chargeback will be marked as Won in the Disputes tab in eCom (C-Series).

Accepting a chargeback

Accepting a chargeback may sometimes be the best course of action, especially if the case is justified or the effort to dispute outweighs the return.

To accept a chargeback:

1. Navigate to the Financial services page > Disputes tab in eCom (C-Series).

   

   You can also open the chargeback alert email from the Lightspeed Payments team and click Respond to dispute to access chargeback information on the Financial services page in eCom (C-Series).

   Always verify information in an email, like the sender address, details in the email, links, and landing page URL addresses before entering information like login details.

2. Locate the dispute and click its Response deadline date (blue hyperlink) to view the dispute details.

3. Click Accept dispute.

   

Checking on the status of a dispute

To view the status of an active dispute, navigate to the Financial services > Disputes tab in eCom (C-Series) You can also view the status of closed disputes from this page.

For more details on an active or closed dispute, click the Response deadline date (blue hyperlink) to open the Dispute details page.

Examples of chargeback situations

Chargebacks can happen for a variety of reasons. Here are a few example situations:

Challenging a chargeback: Mara receives a reminder email a few days before the renewal date of their monthly subscription delivery. The renewal is processed and the delivery is shipped. Mara hasn’t received shipping confirmation, so they decide to cancel the subscription. When Mara sees the charge, they contact their bank to file a chargeback. You successfully dispute the chargeback with evidence of the renewal reminder and proof the subscription wasn’t canceled before the deadline.

Resolving a chargeback with a customer: Steve orders products from your business but doesn’t recognize your legal business name, 12345 Canada Inc, on their credit card statement. Steve initiates a chargeback, thinking the transaction was fraudulent. You contact Steve to clarify the charge and provide details of the purchase, like the date, amount, and items purchased. Reassured that the charge was legitimate, Steve contacts his bank to cancel the chargeback and sends you the withdrawal letter from their bank. You challenge the chargeback in eCom (C-Series) and submit the withdrawal letter as evidence.

Accepting a chargeback: Cindy purchases items from your business. When looking at their credit card statement, they notice their card was charged twice for the same transaction. They contact their bank to initiate a chargeback for the second charge. When you consult your records, you realize Cindy was charged twice for the same purchase, so you accept the chargeback.