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Spektrix Payments Chargebacks

Dave Carr
Dave Carr
  • Updated

This article is about Chargebacks in Spektrix Payments. In this article we’ll explain what a Chargeback is and the reasons why Chargebacks may occur. We’ll also provide information on how to handle Chargebacks and steps you can take to reduce Chargebacks.

 

What is a Chargeback?

A Chargeback is a process that enables a cardholder to request a refund for a payment made by credit or debit card.  A Chargeback can occur when a customer disputes a charge with their bank, or the bank suspects a fraudulent transaction.

Some reasons why a customer might want to initiate a Chargeback:

  • Cardholder suspects their card is being used fraudulently
  • A merchant (your organisation) has refused a refund
  • Cardholder was incorrectly charged or charged twice
  • Cardholder has made an accidental purchase or doesn’t recall making a purchase
  • Unrecognised transaction or merchant details on the cardholder’s bank statement
  • Cardholders filing false Chargebacks to retain goods and obtain a refund

WARNING: Repeated Chargebacks initiated by the same cardholder are usually considered as fraud.

 

Are all Chargebacks legal?

Not all Chargeback requests are legal. Different card schemes specify their own criteria.

What are the timescales for raising a Chargeback?

The timescales for raising a Chargeback depend on the card scheme. Typically, a customer must initiate a Chargeback within 120 days of the transaction date.

The 120 day period starts from either:

  • The original transaction date
  • The expected delivery date (where Tickets or Merchandise have not been received)
  • The day the damaged or defective item was received
  • The date the cardholder became aware of a fraudulent transaction

Some types of Chargebacks may have a shorter or longer time frame, depending on the specific reason for the dispute.

 

How will I be notified of a Chargeback?

You can set up real-time notifications to receive an email when a Chargeback is filed. Enabling email alerts lets you respond quickly and resolve potential disputes before they escalate.

To set up Chargeback alerts, follow these steps:

  1. Log into the Essentials Dashboard
  2. In the left hand menu of the Essentials Dashboard, click Notification settings:

     

  3. In the Notification settings screen, toggle the switch to turn on email notifications for Fraud and Chargeback notices:

     

    email_notification_settings.png

 

What is the Chargeback process for Spektrix Payments?

The Chargeback process consists of several stages:

  1. The cardholder files a Chargeback through their bank or card issuer. Depending on the scheme, the cardholder usually has up to 120 days after purchase to dispute a charge. Some card schemes allow up to 365 days.
  2. The cardholder’s bank or card issuer reviews the case, assigns a Chargeback reason code, and initiates the Chargeback.
  3. An initial refund is transferred back to the cardholder’s account.
  4. The card scheme (Visa/Mastercard/AMEX/Discover) receives the Chargeback and forwards it to the acquirer (Spektrix Payments).
  5. The acquirer (Spektrix Payments) receives the Chargeback and debits the funds from the Merchant’s (your Adyen) account. The acquirer also charges the merchant a Chargeback fee.
  6. The sub-merchant (in this case, your organisation) will review the Chargeback and provide supporting documentation if you choose to challenge the dispute. You must defend the Chargeback within 14-40 days. Timeframes can vary for each card scheme, you’ll see this in the Disputes area of the Adyen Essentials Dashboard.
  7. The acquirer forwards the merchant its decision through the scheme to the card issuer.
  8. The issuer reviews the defence documents and decides to uphold or reject the Chargeback claim.

If the card issuer accepts the defence, the acquirer will return the funds to the merchant (your organisation). If the issuer declines the defence, no further action is required from either party.

 

What happens when I receive a Chargeback notification?

When you receive a Chargeback notification you’ll need to:

  1. Review the Chargeback notification
  2. Establish the cause of the Chargeback
  3. Investigate the transaction in Spektrix
  4. Accept or Dispute the Chargeback

 

Review the Chargeback Notification

When a cardholder files a Chargeback, you’ll receive an email from Adyen containing important information such as the reason code, transaction date, and amount.

Make a note of any timelines for responding to the Chargeback. If you don’t respond to the dispute in time, you’ll automatically lose the dispute and the Chargeback will be upheld.

 

Establish the cause of the Chargeback

In the Disputes area of the Adyen Essentials Dashboard you’ll be able to view the reason for the Chargeback:

 

dispute_reason.png

Some common Chargeback reasons include:

  • Fraud: The cardholder claims their card has been used without their permission
  • Product/Service Not Received: The cardholder didn’t receive their Tickets or Merchandise
  • Duplicate Transaction: The cardholder was charged twice
  • Incorrect Charges: The cardholder was charged the incorrect amount
  • Cardholder Dispute: Problems with a refund or cancelling an Order

 

Investigate the Transaction in Spektrix

To dispute the Chargeback, you’ll need to investigate the transaction in Spektrix by:

You can also view Scanned Tickets by building a Scanned Tickets Report based on a Sales Report Type. Use Event as the Criteria set and add the Ticket Scans metric in the output columns:

Read How to Build a Custom Report for more information.

 

Decide whether to accept or dispute the Chargeback

To decide whether to accept or dispute the transaction, consider the following actions:

  • Evaluate the Case: After you’ve searched for any Orders or Transactions in Spektrix, decide if you want to accept or dispute the Chargeback.
  • Accept the Chargeback: If the Chargeback is valid and you believe the cardholder’s claim is justified, accept the Chargeback and document the issue to prevent it from recurring.
  • Dispute the Chargeback: If you believe the Chargeback is invalid, prepare to dispute it.

 

How to Accept a Chargeback Dispute

You may want to accept the dispute if:

  • Your supporting documents do not satisfy the supporting document requirements.
  • The transaction amount is not high enough to spend time and resources on gathering evidence.
  • The transaction amount does not out weight the risk of losing the Chargeback fee.
  • The transaction is known to be fraudulent. Chargebacks are designed to protect cardholders and enable them to request a refund for fraud or unathorised charges.
  • The cardholder has returned the goods, or you have failed to deliver the goods.

To accept the dispute, follow these steps:

  1. In the left hand menu of the Essentials Dashboard, click Disputes:

     

  2. Select the Chargeback from the list by clicking on the row:

     

  3. Click Accept dispute and follow the on screen instructions:

     

TIP: Once you accept the Chargeback and the defence period has expired, the final status will be set to Lost and the dispute cycle ends.

Adyen will automatically defend Chargebacks that don’t require any action from you. This includes:

  • Transactions where a refund was given before the Chargeback was raised.
  • Chargebacks that include technical errors that invalidate them. For example when a Chargeback is sent outside the time frame allowed by the schemes.
  • Chargebacks with a fraud reason code where there was a liability shift.

TIP: The 3D Secure liability shift rule protects you from fraudulent transactions.

The liability for fraudulent Chargebacks shifts from your organisation to the card issuer when 3D Secure liability shift applies. For example, a customer denies they’ve made a purchase, but a payment is successfully authenticated through 3D Secure.

 

How to Dispute a Chargeback

If you want to dispute the Chargeback, you’ll need to:

  1. Prepare Supporting Documentation
  2. Submit Supporting Documentation

 

Prepare Supporting Documentation for Dispute

Compile all relevant documents and data to support your case.

WARNING: When uploading Reports as supporting documentation, only include details of the cardholder who raised the chargeback. Do not include any other customer details.

  • Customer communication: A log of any emails and phone calls to and from the customer.
  • Delivery confirmation: Print at Home/E-tickets or Postal Tickets.
  • Terms and Conditions:  A copy of the Terms and Conditions the customer has agreed to.

WARNING:  Email delivery logs include the sender's details, recipient’s email address, the type of email sent and status of delivery. Email logs are only kept for 30 days.

 

Submit Supporting Documentation

You can submit any supporting documentation in the Disputes are of the Adyen Essentials Dashboard. You’ll need to open the dispute and scroll down to the Additional Information section where you can upload your documents:

 

 

You must submit any supporting documentation within the timescale specified in the dispute:

 

  

 

Once’ you’ve uploaded your documents, click Submit Defense:

WARNING: Do not send any supporting documentation to Spektrix. You’ll need to upload these within the Chargeback in the Disputes area of the Adyen Essentials Dashboard.

 

Supporting Documentation Requirements

When you defend a dispute, you’ll need to upload supporting documents as part of your defence. The number of documents differs depending on the dispute type.

Your supporting documents should be in the following formats and not exceed the maximum file size:

  • JPG: Maximum file size 10 MB
  • TIFF: Maximum file size 10 MB
  • PDF: Maximum file size 2 MB

TIP: For Diners and Discover, the maximum file size is 3 MB. For Mastercard, the maximum number of pages for a Chargeback defence is 19.

For best results, the original document should be either be A4 (21 x 29.7cm) or US Letter (8.5 x 11cm)

WARNING: After you submit your documents, you can’t change your defence.

 

How to track a Dispute

Once you’ve submitted the supporting documentation, you can monitor the status of the dispute through the Disputes section of your Essentials Dashboard:

 

TIP: You may be asked to upload additional information. Respond in a timely manner and upload any further requested documents.

 

How to account for a Chargeback in Spektrix

When a Chargeback is upheld, the Customer is refunded using your in-process funds (also known as available balance) in your Adyen account.

As Adyen doesn’t pass this information back to Spektrix, you’ll need to recognise this refund in Spektrix by performing a Return and Refund using a Custom Payment Type.

A Custom Payment Type is used to recognise a refund that has taken place outside of Spektrix and can help you reconcile these transactions as part of your financial Reporting.

 

How to prevent future potential Chargebacks

  • Review your Internal Processes: After resolving the Chargeback, review what caused it and establish if there are gaps in your communication, ticketing process, or payment system.
  • Follow up with the Cardholder: Regardless of the outcome, consider following up with the cardholder to clarify the situation and maintain a positive relationship, if appropriate.
  • Follow up with Spektrix: Adyen automatically blocks cardholders who have raised a dispute. If you’re confident that the cardholder will not raise further Chargebacks, we can remove the cardholder from the block list on your account. Contact our Support Team to request this.

 

How to reduce the number of Chargebacks

There are a number of ways you can reduce the number of Chargebacks:

  • Risk Rules: Use Adyen’s risk management tools to create rules that filter out high-risk transactions, such as suspicious IP addresses, mismatched billing and shipping information, or unusual purchasing behaviour. This is managed by our Support Team. Contact Support to find out more.
  • Clear Payment Descriptions: Ensure that the payment descriptor (the name that appears on the cardholder’s statement) is clear and recognisable. If a card holder doesn’t recognise the payment descriptor, this could lead to Chargebacks being raised for unrecognised transactions.
  • Adyen Transaction Insights: Adyen’s transaction insights and analytics will automatically monitor for patterns in Disputes and Chargebacks. This can help you identify frequent causes of disputes and address them proactively.
  • Real-Time Customer Support: Make it easy for Customers to contact your team with questions about their Orders. Quick resolutions can prevent Chargebacks filed out of frustration.
  • Offer Refunds Proactively: If a Customer is unsatisfied or requests a refund, consider handling it directly instead of directing the Customer to go through their bank. A simple refund process can often prevent disputes from escalating to Chargebacks.
  • Comprehensive Transaction Records: Ensure that you keep a record of the transaction. This is usually the Order history in Spektrix, or logs showing the delivery of the Order Confirmation and Print at Home emails. Contact Support to request screenshots of email delivery logs. Adyen’s reporting tools can also help you track these details for any disputes.

REMINDER: Email delivery logs include the sender's details, recipient’s email address, the type of email sent and status of delivery. Email logs are only kept for 30 days

  • Proof of Attendance: Make sure all Tickets are scanned. You can View Scan History in the Order:

     

  • Capture attendance data using the Event Instances Occupancy Report or, which can be crucial evidence in a Chargeback case.

This article should give you the information you need to understand Chargebacks in Adyen and Spektrix Payments.

To learn more about payments, visit the Manage Payments section of the Support Centre.