Dealing with a chargeback on Lightspeed Payments

After you set up Lightspeed Payments in your Ecwid store, you can start accepting payments from your customers. Occasionally, you may face a chargeback—a forced reversal of a transaction initiated by a customer. Chargebacks can happen for quality issues, merchandise not received, duplicate processing, or other reasons.

When you receive a chargeback, Lightspeed Payments team send you a notification with with details to your email that you've specified during the payment processor setup. You can view and manage chargebacks from the Finance page in your Ecwid admin.

You can resolve a chargeback with a client, dispute it, or accept it. If you win the case, the disputed amount will be returned to you. If the case is lost, money will be returned to a customer. Regardless of the outcome, you will be charged a $15 fee per chargeback.

Chargeback reasons

Any chargeback is very likely to fall under one of the following reasons:

• Authorization: An authorization was required but not obtained, or an authorization request received a Decline or Pickup response, and the transaction was completed anyway
• Consumer Dispute: Chargebacks initiated by the cardholder in regards to product, service, or merchant issue (for example, shipped goods were not received).
• Fraud: Fraudulent transactions
• Processing Errors: Disputes including Duplicate Charge, Incorrect Charge Amount, and other similar situations

You can dispute a chargeback with evidence that supports the legitimacy of the transaction. For each of the reasons, you may need to provide specific evidence to win the dispute. 

Chargeback process in Lightspeed Payments

A chargeback process typically involves the following steps:

1. Customer files a dispute regarding the charge with their bank and the bank opens a chargeback with the your bank.
2. Your bank debits your account for the disputed amount and the non-refundable chargeback fee. Disputed funds are set aside to be awarded to the winner of the dispute.
3. Your bank notifies the Lightspeed Payments team of the chargeback and the team emails you the details of the chargeback.
4. You decide what to do with a chargeback:
   • Resolve with a customer. You can try to contact your customer and convince him to cancel their chargeback.
   • Challenge a chargeback: You can gather evidence to prove the charge is legitimate and the chargeback unjustified. Remember that you must submit evidence by the deadline or you will automatically forfeit the dispute.
   • Accept a chargeback: You can refund the disputed amount to your customer.
5. The Lightspeed Payments team shares the response and evidence with your bank.
6. Your bank shares the response and evidence with the customer’s bank.
7. Your bank reviews the chargeback dispute and all supplied evidence to determine whether the customer or merchant won the dispute. Funds are awarded to whoever wins the dispute.

Viewing Lightspeed Payments chargebacks

Once you receive a chargeback, you will get a notification on the email you specified during the Lightspeed Payments setup. 

You can also go to the Finance page in your Ecwid admin to see if there're any active chargebacks. You can check their status, including the response deadline, reason for the dispute, and total amount of the dispute.

To view chargebacks and check their status:

1. From your Ecwid admin, go to Finance.
2. Switch to the Disputes tab.

3. To view the details of each chargeback, click its name in the Response deadline column:

   

Resolving a chargeback with a customer

You can try to resolve a chargeback by contacting a customer.

If they agree to cancel the chargeback through their bank:

1. Ask a customer to provide a withdrawal letter from their credit card company confirming cancellation.
2. From your Ecwid admin, go to Finance and switch to the Disputes tab.
3. Submit the withdrawal intent as evidence, including the withdrawal letter if possible.

When a dispute is successfully withdrawn or the transaction determined legitimate, the chargeback will be marked as Won:

Challenging a chargeback dispute with Lightspeed Payments

To challenge the chargeback, you need to provide evidence supporting the transaction's legitimacy:

• Transaction details such as the payment amount, entry method, the cardholder's name, or the time and date of the transaction.
• Proof the transaction in dispute has already been refunded.
• Proof your policies and terms and conditions were conveyed to the customer or are listed clearly on the customer’s receipt.

To challenge a chargeback with Lightspeed Payments:

1. From your Ecwid admin, go to Finance and switch to the Disputes tab.
2. Find the dispute and click its date in the Response deadline column.
3. Click Challenge dispute.
4. In the Challenge reason box, explain why you believe the dispute is invalid. 
5. In the Upload evidence section, you can add any relevant docs you have to support you.
6. Once you've upload all supporting documents, click Submit evidence.

If the evidence proves the legitimacy of the charge, the chargeback will be overturned and funds will be returned to you. You’ll receive another email about it with the details.

Accepting a chargeback with Lightspeed Payments

Accepting a chargeback may sometimes be the best solution, especially if the case is justified or the effort to dispute outweighs the return.

To accept a chargeback with Lightspeed Payments:

1. From your Ecwid admin, go to Finance and switch to the Disputes tab.
2. Find the dispute and click its date in the Response deadline column.
3. Click Accept dispute.

Customizing dispute notification recipients

Email notifications for disputes are sent to the email address that you used to apply for Lightspeed Payments. You can update this setting to add more recipients, for example, the email of your accountant.

When adding additional notification emails, make sure to include the original email set during the payment processor setup. Otherwise, it will be excluded from the notifications list.

1. From your Ecwid admin, go to the Finance page.
2. Switch to the Settings tab and click Notifications. 

3. Click Add dispute recipient:

   

4. Enter the email address. Make sure to include the initial email.
5. Specify required details.
6. Click Add.

Best practices for a chargeback prevention

Lightspeed Payments has its own methods to detect fraud and prevent chargeback. For instance, comparing the billing and shipping addresses of a customer. In case of any suspicious customer, Lightspeed Payments will cancel the payment. Lightspeed will also deal with the banks and processors on your behalf, and advise you on how to resolve the issue.

To ensure your store is protected from fraud and risk of a chargeback, you can implement some techniques along with the Lightspeed Payments security methods. With the appropriate precautions, it's possible to reduce chargebacks considerably.

Here are some tips you can use to protect your Ecwid store.

To prevent fraud:

• If you ask for a phone number, call it to verify customer identity
• Email the address associated with the order to verify customer identity
• Search for the email address or customer name online and social media
• Check if multiple orders use different billing addresses for the same shipping address
• Look up the billing address on Google
• Review high value orders, or if there are multiple orders by the same person in a short time span

To minimize a risk of a chargeback:

• Promptly ship physical products after you receive payment
• Ensure customers know when products will be shipped and when they should be delivered. You can inform customers about delivery dates right on product pages.
• Make it easy for customers to reach out to you: display contact info on your site, send receipts upon payment, and so on
• Provide clear terms of service and legal information
• Reply to emails promptly, and regularly check direct message on social media
• Use delivery confirmation for large purchases
• Fulfill cancellation requests quickly and completely

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