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Intuit

Chargeback FAQs

A chargeback is a transaction that has been disputed by the cardholder or card issuer. Chargebacks occur for the following reasons:

  • The cardholder does not recognize the charge.
  • Fraud/unauthorized charges.
  • Service/merchandise not received.
  • Service/merchandise not as described or defective.

Chargeback FAQs

How long will it take to complete the process? What is involved?

Cardholders have 120 days from the date of expected delivery of services/merchandise to dispute a transaction. This may be different than the sale date. Once a merchant responds with a documentation of the chargeback, it can take up to 90 days to complete the chargeback cycle. If the case goes to Arbitration, this will take additional time for the case to be reviewed and processed.

What if the merchant already issued a refund?

Our system will check for credits issued when a chargeback comes in, but on occasion, it will not be picked up automatically. For instance, if the sale amount differs from the credit amount, the system will not be able to match the items. Another instance is, If the merchant issues a credit after the chargeback has posted to the merchant account. When a merchant states they have a chargeback and a credit was issued, please advise them to send in a documentation stating a credit has been issued to the cardholder.

What is a retrieval request?

Because of occasional billing questions, there may be instances when a copy of the sales draft is required by the cardholder's issuing institution. Card Associations require that merchants retain sales drafts on or off premises for three (3) years. For tax purposes, however, you may wish to retain drafts for seven (7) years. When a sales draft is required from your records, you will receive a retrieval request notice listing the Intuit case number, first four and last four digits of the credit card, transaction date, transaction amount, respond by date, and retrieval request reason. Therefore, a storage system that is sorted by date can provide the speediest retrieval. Forward a copy of the draft along with the retrieval request notice to fax number 818-436-8988 or e-mail address cb@intuit.com. To avoid a chargeback or pre-compliance, you should always send the sales draft copy no later than the respond by date.

Why do I have no recourse to challenge my chargeback?

There are some situations in which you can't challenge a chargeback. These are called no recourse cases. Some common causes are:

  1. Canceled recurring transaction.
    If a customer requested to stop the billing to his/her credit card, any charge that follows the request is subject to a chargeback with no recourse.
  2. Required authorization not obtained.
    If a customer's card is declined, there's a reason. Don't complete the transaction.
  3. Non-receipt of goods/services.
    The merchant receives returned merchandise that was not delivered to the cardholder.
  4. Not as described/defective merchandise.
    The merchant does not authorize the cardholder to return merchandise that was received damaged or defective.
  5. Unauthorized transaction.
    The cardholder claims (s)he did not authorize the transaction.
    1. The issuing bank certifies the customer's information (i.e. name, bill to/ship to address, phone number, e-mail address, IP address) does not match their cardholder's.
    2. The ship to address differs from the bill to address, especially if the product is to be sent overseas, particularly to Asia, Africa, Middle East or South America.
    3. Multiple cards are used to split a transaction into smaller amounts.
    4. Funds were wired to pay for shipping costs. Such transactions are fast money for the perpetrators, who typically run off with the funds as soon as they are received.
  6. No proof of proper disclosure.
    The Card Associations' definition of proper disclosure of a merchant's return/cancelation policy is that the cardholder must have acknowledged by signing or initialing in close proximity of said policy. This provides evidence they have read and agreed to the merchant's return/cancelation policy. They specifically require a retail merchant to have the policy printed on the sales draft below the signature line and be at least 1/4" in size. An e-commerce merchant must place their policy on their website and have the cardholder click to accept or agree to the terms and conditions during the checkout process. A link to the terms and conditions that takes the cardholder away from the sequence of website pages to checkout is not considered proper disclosure.
Note: If the issuing bank deems that you can't dispute a chargeback, you will receive a no recourse notice that explains the reason(s) why.

How long does a cardholder have to dispute a charge and are there any exceptions to the time frame?

For most disputes the time frame is 120 days (U.S.) and 180 days (International) from the transaction date of the original sale or the date of discovery of the issue (i.e., defective merchandise). However, in some instances the time frame may be longer or shorter depending on the specific reason code. American Express allows their cardholders one (1) year from the transaction date to file a dispute, whether it is filed as an inquiry or chargeback.

How long does the card issuing bank have to respond once Intuit has submitted all the necessary forms?

The card issuing banks are in control of this process and they can take up to 60 days to respond to our re-presentment.

What if the original transaction was international and not based on U.S. denominations?

If a charge is made to the merchant, the amount will be based on the most current U.S. exchange rate between that foreign denomination on the day the final decision is made (not the original date of the transaction).

Why do I have to pay a chargeback fee when the transaction is valid and the customer is the one who initiated the chargeback?

The chargeback fee is applied to all chargebacks received regardless of the outcome of the case. This fee covers the administrative costs associated with processing the chargeback.

How can I get a chargeback when I received an approval code on the transaction?

An authorization code simply verifies that the card is in good standing, has not been reported lost or stolen at the time of the transaction, and has sufficient funds available for the amount of the transaction you are attempting to process. An authorization code does not guarantee that you will not receive a chargeback.

Why isn’t there a cardholder name on the documents I received?

Issuing banks are not required to provide a cardholder’s name to the acquirer or the merchant. For some chargeback reason codes the cardholder’s name might be found within the supporting documentation; however, not all reason codes require the issuer to supply supporting documentation. A cardholder’s name is never provided by the issuer on a copy request/retrieval.

Why does the transaction get an approval code if there is a negative A VS or Card Verification response?

A VS and VV/CC/ACID are tools designed to help the merchant make the best possible decision when accepting a transaction. If you get a negative VV/CC/ACID or A VS response, you should review the transaction in its entirety to determine if you want to continue with the sale regardless of whether or not you received an authorization code. Negative responses on VV/CC/ACID or A VS can be an indicator of potential fraud.

If I get an approval code, how can I receive a chargeback for an Invalid Card Number?

The first six digits of a credit card identifies the bank that issued the card. If the first six digits of a card are valid, an authorization code can be granted by the system, especially on smaller transactions as the system will stand in for the issuer and provide an authorization in most of these cases.

I post the cancelation/refund policies at the register. Why isn’t this accepted by the Card Associations?

The Card Associations’ definitions of proper disclosure of your return/cancelation policy are that the cardholder must have acknowledged the policy by signing or initialing in close proximity of said policy. This provides evidence they have read and agreed to your return/cancelation policy. They specifically require a retail merchant to have the policy printed on the sales draft below the signature line and be at least 1/4 inch in size. An e-commerce merchant must place their policy on their web site and have the cardholder click to accept or agree to the terms and conditions during the checkout process. A link to the terms and conditions that takes the cardholder away from the sequence of website pages to checkout is not considered proper disclosure.

Why do I have to wait so long for an answer to Arbitration, Compliance, and Good Faith?

Specified time frames are allotted by Card Associations for each step of the process. This allows the merchant’s processor and the cardholder’s bank to obtain and submit appropriate documentation to be reviewed in each case. Intuit and the issuing bank have no control over the length of time it takes for the Card Associations to rule on a case.

Why did you debit my account without notifying me first?

When the chargeback is initiated by the card issuing bank and sent to Intuit, an automatic debit follows. This debit is passed to the merchant as long as the issuer has met all of the association requirements for the particular reason code they used to process the chargeback. This is in accordance with your merchant agreement and the service for which you signed and/or received during the initial sign-up and activation of your account.

Why are you taking the cardholder’s side without getting my side of the story?

Intuit has no interaction with any cardholder who may be disputing charges. Intuit represents you, the merchant, and assists you in providing the correct information on any dispute you might receive. Our goal is to help you resolve these disputes in your favor. However, all remedies to a chargeback must be in compliance with the Card Association rules and regulations.

How can I protect myself from chargebacks on special ordered items that require a deposit or restocking fees if a customer decides later they do not want the item?

Your best defense is to obtain cardholder signatures for all transactions and properly document and have the cardholder sign the cancelation/return policy on any order. It is also very important to manage the customer’s expectations up-front, document your efforts and work directly with the cardholder to resolve misunderstandings or conflicts.

What makes American Express chargebacks different from other chargebacks?

An important distinction about American Express chargebacks and inquiries is that an American Express customer can issue as many inquiries and disputes as they like within one year to the date of purchase. Additionally, if a merchant does not respond to an American Express inquiry or retrieval request within the specified period of time, American Express will automatically charge the transaction back to the merchant for Non-Reply to Inquiry/Retrieval. Therefore, a merchant MUST respond to every retrieval request and inquiry, even if it is a repeated request.

Chargeback and inquiry/retrieval notices include detailed instructions for where you should send responses.

What documents do you need to respond to a chargeback, retrieval or inquiry?

In order to quickly resolve disputed chargebacks, it’s important that you respond upon receipt of the notification.

  • Card Present documentation:
    • A clear copy of the signed sales receipt must be sent to INTUIT. You must be able to make a copy of the document, read the details of the copy and be able to fax or e-mail the document so it is received in a readable condition.
    • A clear copy of the imprinted draft with the card holder signature and a description of the goods or service purchased.
  • Card not present documentation:
    • Sales amount
    • Date of sale/credit
    • Cardholder’s account number
    • Cardholder’s name
    • Description of goods and services
    • Proof of delivery
    • Date and authorization approval code-including any authorization document that your gateway may provide with A VS.
    • A dated cover letter detailing the reasons for requesting a review of the Chargeback and documentation to support your dispute should accompany your sales record. (You should retain a copy of all correspondence and all documentation for your files.)

Immediately submit the sales/credit records, all documentation and your letter to INTUIT. It is strongly recommended that, whenever possible, you contact the cardholder directly to resolve a Chargeback. Request a letter from the cardholder if they feel you have remedied the dispute. If the cardholder states (s)he dropped the Chargeback, request that (s)he supply you with a copy of the bank’s letter (on letterhead) that states (s)he has been rebilled for the disputed charge.

Have you received my response to my chargeback, retrieval or inquiry?

It takes 24 – 48 hours for the responses to be attached to your case.

What is Chargeback: Pre-Arbitration (Visa, MasterCard and Discover Pre-Arbitration)?

Pre-Arbitration is the 3rd step in a chargeback and occurs when the cardholder still wants to dispute the charge after a decision was already made. In most cases cardholders have 120 calendar days from the date of expected delivery of services/merchandise to dispute a transaction. This may be different than the sale date. Once a merchant responds with documentation to the chargeback, it can take up to 90 calendar days to complete the chargeback cycle. If the case goes to Arbitration, this will take additional time for the case to be reviewed and processed.
Please see the Pre-Arbitration Overview file. Included are examples of the notices and arbitration consent forms that are sent to merchants that receive a pre-arbitration or CB3. When a Discover or Visa pre-arbitration is accepted, we will receive a Code 98 debit from Chase PTS (Paymentech Systems). The Code 98 will be visible in ASC in the chargeback case.

For more information, see What is a Chargeback?