Processing Credit Card Chargebacks

A chargeback typically happens as part of a product return, when a customer disputes the charge. The bank issues funds to the buyer, then levies a fee on the seller. Because the bank has already refunded the customer, you should account for the return without issuing a refund (i.e. avoiding a double refund).

  1. In the Receipts module, locate the Posted receipt for the transaction.
  2. At the detail view, select Actions > Credit/Adjust Receipt, then at the confirmation dialog, click Adjust.
  3. In the new reversal receipt, enter the actual date of the chargeback for the Deposit On date.
  4. Click Save, but do not post the receipt. At the confirmation dialog, click Not Yet.
  5. Click Admin Actions () > Post Receipt Without Credit Card Processing, then click Post.
  6. Navigate to the General Journal module and create a new journal entry to address the chargeback fee:
    • Enter data for the journal entry, as needed.
    • First entry item — Select the bank account that the fee was taken from, with the full amount of the fee set as the Credit.
    • Second entry item — Select another account for the fee, with the full amount set as the Debit.
      Note: This account could be one set specifically for chargebacks, refunds, or fees. Consult with your accountant to ensure you are using the most appropriate account for the situation.
  7. Click Save, then click Post