TABLE OF CONTENTS




What is a chargeback?

A chargeback is a payment that is returned to a cardholder after a cardholder disputes a charge on their account statement. A chargeback can occur on debit or credit card transactions.


Federal law requires card issuers to offer chargebacks within 60 days of the date of billing. Some financial institutions offer longer periods of time. Policies are determined by each financial institution.

 

How am I notified of a chargeback? 

PropertyBoss sends you an email with the chargeback details.


If you see an unexplained deduction(s) from your bank account, this could also be an indication that a chargeback has occurred but PropertyBoss has not received notice of it yet. There could be a one-business day delay between a bank deduction and documentation provided for the chargeback.

 

What is the chargeback process?

  1. Debit/credit card charge is processed: A cardholder pays for something related to your business using a credit or debit card. The transaction is processed, and you receive the funds in your bank account.
  2. Cardholder disputes the charge: The cardholder sees the transaction and files a dispute with their financial institution, also called the issuing bank.
  3. Chargeback process begins: The issuing bank gives the cardholder a temporary credit for the transaction and then initiates the chargeback process by contacting PropertyBoss.
  4. Funds deducted from business’s account: After PropertyBoss learns of the chargeback, you’ll be notified and the disputed funds will typically be deducted from your bank account until the dispute is resolved.
  5. You can dispute the chargeback: You're given the opportunity to provide documents to dispute the chargeback. If you don’t respond to the chargeback notification, the issuing bank will typically grant the chargeback to the cardholder.
  6. Issuing bank makes a decision: If you provide documents to dispute the chargeback, the issuing bank will evaluate the evidence and make a decision. They have 60 days to provide an answer. PropertyBoss notifies you if the chargeback was approved or denied. If the issuing bank rules in your favor, the cardholder is held responsible for the payment. The issuing bank will send the funds back to you electronically.

 

How do I document a chargeback in PropertyBoss?

PropertyBoss recommends the following best practice steps. These are suggestions and should not preclude your operational policies.


If the chargeback is the full amount of the payment:


Example: A cardholder paid $1000 for rent. The cardholder has disputed the $1000 transaction on their account statement.

  1. Manually reverse the EFT Payment on the register.
    1. Use the chargeback date or the date of the deduction in your bank account as the reversal date.
    2. When asked, do NOT credit back the funds.
  2. Place the payment and reversal on a correcting batch.
    1. Close the correcting batch.

 

If the chargeback is denied (ruled against you):

  • No further action is needed.  

 

If the chargeback is approved (ruled in your favor):

  1. Add a Tenant Payment (not electronic payment) transaction to the register in the amount of the payment.
  2. Use the date you received notice of the chargeback win or the date reflected next to the credit on your bank statement.
  3. Place the payment on its own batch.
    1. Close the batch.

 

 

If the chargeback is a partial amount of the payment:


Example: A cardholder paid $1000 for rent on August 1. The cardholder has disputed $600 of the $1000 transaction on their account statement.

  1. Manually reverse the EFT Payment on the register.
    1. Use the chargeback date or the date of the deduction in your bank account as the reversal date.
    2. When asked, do NOT credit back the funds.
  2. Add a Tenant Payment (not electronic payment) transaction to the register in the amount the cardholder agreed to pay. (In this example, it’s $400.)  
    1. Use the date of the original EFT Tenant Payment (In this example, August 1). (You still have $400 in your bank account from this payment.)
  3. For accounting purposes:
    1. If you use the PropertyBoss General Ledger:
      1.  Place the initial EFT Tenant Payment and reversal on a correcting batch.
        1. Close the correcting batch. 
      2. Place the Tenant Payment on its own batch. 
        1. Close the batch. 
        2. The batch can be reopened if the chargeback is won. 


If the chargeback is denied (ruled against you):

  • If you use the PropertyBoss General Ledger
    1. No further action is needed.  

 

If the chargeback is approved (ruled in your favor):

  1. Add a Tenant Payment (not electronic payment) transaction to the register in the amount of the payment.
  2. Use the date you received notice of the chargeback win or the date reflected next to the credit on your bank statement.
  3. Place the payment on its own batch.
    1. Close the batch.