How do you record a credit card chargeback?

Hello there, @ReneeRFP.

Dealing with a transaction dispute shouldn’t take so much of your time, I'm here to share some ways on how to record your customer's credit card payment reversal.

To reverse your customer's payment, here's how to create credit memo:

1. Go to the Customers menu.
2. Select Create Credit Memo.
3. Choose the name of the Customer:Job.
4. Enter the credit memo details.
5. Click Save and Close.

Once completed, you can now write a check with the total amount of the refund. Here's how:

1. Click Banking.
2. Choose Write Checks.
3. Select the Bank account where the check will be posted.
4. Enter the name of the customer in the Pay to the Order of.
5. Type in the total amount of the refund or credit.
6. In the section for Memo, enter the Credit Memo numbers.
7. Go to the Expenses tab.
8. Choose Accounts Receivable in the Account column.
9. Enter the amount of the refund and the name of the customer.
10. Click Save and Close.

To avoid getting  open credit memos and an unapplied refund checks, let's link the credit memo to the check. Here's how:

1. Click the Customer menu.
2. Choose Receive Payments.
3. From the Received from drop-down, select the Customer.
4. Go to Discounts And Credits.
5. In the Available Credits section, mark the check you created, then select Done.
6. Select Save & Close.  

On the other hand, since the processing fee for the reversal will be shouldered by your customer, here's how to record it in QuickBooks:

1. Create a clearing account where the fee will be recorded.
2. Received a payment with the amount enough for the the credit card reversal processing fee and the customer as the payee.
3. Record the payment under the clearing account.
4. Create an expense account to record the processing fee.
5. Ensure to record the expenses under the clearing account.

That should do it! Don't hesitate to visit us here in the Community if you have other questions about recording credit card refunds. I’m always here to help.

This sounds like you are saying to create a credit memo for the customer who owes us money? The screen shots are small and hard to see/read but I'm not following this process. They owe us the funds back along with the fee for the reversal of the charges. 

Hello ReneeRFP,

Thank you for getting back here in the Community. I'm here to lend a hand with your concern about the credit card chargeback in QuickBooks Desktop.

Once there are chargebacks from customers, we usually notify and request info to challenge the reversal on your behalf. The issuing bank will then decide whether it's valid or invalid.

You can use the Journal Entry feature to reverse the original payment in the system. Once done, the next step would be replacing the existing payment linked to an invoice using the JE transaction.

The process is similar to creating a bounced check coming from a customer. For the detailed instructions, I'm adding the article I recommend on this (scroll down to Option 2):

Handle Non-Sufficient Funds (NSF) or bounced check from customers.

I also recommend seeking expert advice from an accountant to guide with the process and ensure your books will be correct.

Keep in touch with me here should you have any additional questions or concerns regarding the credit card chargeback. I want to make sure you're taken care of.