1. Using Receivables Credit to Cash
  2. Credit Card Chargebacks

Credit Card Chargebacks

A customer can request a refund for all or part of a previously remitted credit card receipt directly with the credit card issuer.

Under this procedure, the credit card issuer credits the customer account for the disputed amount, deducts the amount from your merchant bank account, and notifies you that a credit card chargeback took place.

You record the credit card chargeback as a negative miscellaneous receipt. Because the customer has already received the refund directly from the credit card issuer, this negative miscellaneous receipt is used only to ensure accurate accounting and reconciliation.

To record a credit card chargeback:

  1. Ensure that you have defined a receivables activity of type Credit Card Chargeback.

  2. In the Manage Receipts page, open the credit card receipt with the chargeback request.

  3. Unapply the credit card receipt:

    • If you're unapplying the full amount, use the Unapply Application button to unapply the credit card receipt application from the transaction.

    • If you're only unapplying a partial amount, enter the new amount to apply to the transaction in the related Applied Amount field.

  4. Create the credit card chargeback. Select Create Credit Card Chargeback from the Actions menu to open the Create Credit Card Chargeback window:

    1. Enter the Credit Card Chargeback activity in the Receivables Activity field.

    2. Enter the amount of the chargeback request in the Amount field.

    3. Enter the date to use for this transaction in the Application Date field.

    4. Optionally enter details of this transaction in the Reason field.

The credit card chargeback application and corresponding negative miscellaneous receipt record the event and correct the accounting. Because there are no funds to transfer, you don't have to remit the negative miscellaneous receipt.

Note: If you later discover that the chargeback request was invalid, unapply the credit card chargeback activity from the receipt and reapply the receipt for the full amount. This automatically reverses the negative miscellaneous receipt that was originally created when you first recorded the credit card chargeback.

Related Topics