WHAT IS A CHARGEBACK?

Chargebacks were designed as a form of consumer protection. Chargebacks can be used to dispute a credit card transaction and secure a refund for the purchase. A chargeback voids a credit card transaction, withdrawing funds that were previously deposited into the merchant’s bank account and applying a credit to the patient’s credit card statement.

Chargebacks differ from traditional refunds in one simple way: rather than contacting the business for a refund, the patient goes over the merchant’s head and asks the bank to forcibly remove funds from the business’s bank account. If the bank feels the cardholder’s request is valid, the funds will be removed from the merchant’s account and returned to the patient.

Sometimes a dispute is initiated by accident because the patient did not recognize the business name on their bank/credit card statement. Sometimes the patient requests that their monthly recurring Auto Debit be stopped and it wasn't (due to a balance still on the account, the office staff forgetting to stop the Auto Debit, etc.) so the patient was charged and they contacted their credit card company saying the transaction should not have processed.

IMPORTANT: We do not recommend that you process keyed transactions on your Retail merchant account.  In the event that your patient initiates a chargeback from a transaction that used a chipped credit card and you do not have our EMV terminal - you will not be able to dispute it per the 2015 EMV Liability Shift Rules. We recommend all keyed transactions are processed through the MOTO merchant account. For questions, call 877-343-8950 x105

WHAT ACTION DO I NEED TO TAKE (as the business owner)?

In order to win a chargeback dispute and recover your revenue, you'll need to provide evidence that the transaction was authorized by the cardholder and the goods or services were delivered. You will also need to address the specific reason why the patient filed the chargeback. The issuing bank will look over your evidence and consider it in relation to the claims made by the cardholder. Submit your evidence to the chargeback department by the date printed on the notice. You only have a few days to gather the information and submit it, so take action quickly! 

*If you have multiple chargebacks - you will need to submit your evidence separately for each chargeback.

For the best chance of winning chargeback disputes and recovering your funds, you should provide the following evidence: 

  • Cover Letter - Write a one-page cover letter that outlines the service you provide at your business, lists the evidence attached, and states the reason why the bank should reverse the chargeback in your favor. Include your Chargeback Case # at the top of this letter.
  • Invoice/Statement/Ledger - Provide a document that outlines the service provided. It should include the patient's full name, address, phone number, date of service, cost of service, and the total charge. To protect the patient’s privacy, redact their date of birth, social security number, and the details of the specific test or service performed. 
  • Transaction Receipt - Provide the transaction receipt (signed, if possible). If the transaction in question was already refunded, provide a copy of the refund receipt as well. *do not issue a refund now against a chargeback - see the 2nd section below for more information
  • Agreement/Care Plan - Provide the signed agreement or care plan that outlines the payment agreement along with the cancellation and refund policy. Highlight the policies that you think are favorable to your case.
  • Customer Interactions - If the patient has interacted with you over email or via phone and you have notes to prove it, provide a copy of the communication and notes as well. If the communications contain sensitive information like date of birth, social security number, or test/procedure details, redact that information from the evidence. 
  • Chargeback Notice - Include a copy of the original chargeback notice you received via fax or mail
  • Misc - Anything else that you have that will be helpful to show that the patient DID authorize the transaction and DID receive the services.

HOW DO I SUBMIT MY CHARGEBACK RESPONSE & DOCUMENTATION?

Your evidence (listed above) can either be faxed or uploaded to the chargeback department.
*If you have multiple chargebacks - you will need to submit your evidence separately for each chargeback.

  • Chargeback Dept. Fax Number: (706) 644-5210
  • Chargeback Dept. Upload Link: https://www.merlinkresponse.com/  (We recommend combining all pages into 1 file document, as long as it is 10 megabytes or less). Acceptable file types: PDF, JPEG, and TIF

SHOULD I REFUND THE PATIENT IF A CHARGEBACK WAS INITIATED?

If you have not ALREADY refunded the patient when you receive the chargeback notice, then NO you should NOT refund the patient, as the chargeback will automatically take the funds out of your bank account during the investigation. If you refund after receiving the chargeback notice, essentially the patient will receive double the amount in question. 

It is also against regulations to issue a refund AFTER a chargeback has been initiated.

If you had PREVIOUSLY refunded the patient BEFORE receiving the chargeback notice, then be sure to include those documents and details when you respond to the chargeback within the requested timeframe.

If you win the chargeback, the funds will be deposited back into your bank account.

HOW LONG DOES A CARDHOLDER HAVE TO DISPUTE A CHARGE?

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.

WHY WAS THE AMOUNT OF THE CHARGEBACK TAKEN OUT OF MY BANK ACCOUNT?

During the investigation, the amount of the chargeback WILL be debited (withdrawn) from your bank account. If Paya determines that the transaction was authorized, they will reverse the chargeback and deposit the money back into your bank account.

Please note that the patient's bank has the right to appeal the reversal.

IS THERE A FEE ASSOCIATED WITH A CHARGEBACK?

There is a $25 administrative fee charged by our processing bank, Paya, for every chargeback initiated. Whether you win or lose the chargeback, (even if the patient stops the chargeback), this $25 fee will NOT be reimbursed back to you. The $25 fee is charged on your monthly merchant processing statement (for more information on accessing your monthly statements click HERE).

HOW DO I KNOW WHAT PATIENT THE CHARGEBACK IS FOR?

Step 1: You should have received a fax from Paya (or an email from Cash Practice Systems if you do not have a fax number) notifying you of the chargeback. Paya also mails you the same chargeback letter via mail. (It is very important to keep your contact information up to date with Cash Practice). Halfway down the chargeback notice on the left-hand side, locate the "ORIGINAL REFERENCE" number (this is the Cash Practice Order ID number) 

Step 2: Log into your Cash Practice Systems account and go to your Posted Payment Report Generator. If you are unsure how to access this report, see THIS article.  In the [Search Options], type in the ORIGINAL REFERENCE number into the search field for the Order ID Number. Click [Search]

Step 3: The transaction associated with the chargeback will be listed along with the patient's name. 

WHAT HAPPENS IF THE CHARGEBACK IS REVERSED?

If the chargeback is reversed (based on the documentation that you provided), Paya will deposit the funds back into your account.

Please be advised that Visa and MasterCard have the right to continue with a 2nd chargeback for the same transaction (Visa: pre-arbitration with a possible arbitration filing) if they feel that the transaction was still not authorized. If Visa or MasterCard continues with a 2nd chargeback, you can reach out to the patient directly to try and resolve or you can reach out to law enforcement to file a fraud claim against your patient.

I HAVE A QUESTION ABOUT A CHARGEBACK - WHO CAN I TALK TO?

You can contact Merlin, the third-party company that handles all of Paya's chargebacks.

Merlin's phone number is (866) 637-5467

You will also need your CASE NUMBER which can be found on your chargeback notification towards the top:

If you have additional questions, you may contact Cash Practice, Merchant Services Department at (877) 343-8950 x 105, though Cash Practice has very limited information on chargebacks and Merlin is the best company to speak with regarding ALL chargeback inquiries.