If a cardholder disputes a payment, the cardholder's bank can raise a chargeback or a retrieval request to reverse the payment. You can receive a chargeback for the following reasons:

• The cardholder's bank doesn't support retrieval requests and issues a chargeback.
• You don't respond to a retrieval request before the due date, and the dispute escalates to a chargeback. If this happens, you can no longer defend the chargeback, and the cardholder keeps the transaction amount.
• The cardholder's bank rejects the evidence that you submitted for the retrieval request, and the dispute escalates to a chargeback.

If the cardholder's bank issues a chargeback, we email you a chargeback letter that includes the reason for the chargeback and how long you have to respond. We automatically deduct the transaction amount from your account and also charge a $25 non-refundable administration fee.

In Payroc Insights, you can view your chargebacks or set up InTouch notifications to receive automatic alerts for new chargebacks.

Risks from chargebacks

Every chargeback counts toward your chargeback ratio, including those that you successfully defend. Your chargeback ratio is the percentage of your transactions that result in chargebacks, and a high chargeback ratio puts your account at risk of the following:

• Monitoring program enrollment - Your account enters a monitoring program, which includes monthly fines that increase until your chargeback ratio drops below the card brand threshold.
• Account termination - We might close your account, which means you can no longer accept card payments.
• MATCH list placement - If we close your account due to excessive chargebacks, Mastercard requires us to add you to the Mastercard Alert to Control High-Risk Merchants (MATCH) list. The MATCH list is an industry-wide database that acquirers check before they board new merchants. When you're on the MATCH list, your record stays for five years, and it is difficult to open a merchant account with any acquirer.

To protect your account and keep your chargeback ratio low, you need to understand what causes chargebacks and prevent them from happening. For more information about how to avoid chargebacks, go to Avoid chargebacks.

Your response options

To respond to a chargeback, you can either:

• Accept the chargeback - If you accept the chargeback, the decision is final, and the cardholder keeps the transaction amount.
• Defend the chargeback - Submit your evidence to us. After the cardholder's bank reviews your evidence, they can either:
  • Accept your evidence - The cardholder's bank rules the chargeback in your favor and returns the transaction amount to us, which we then send to your account. You can view the returned amount in Payroc Insights.
  • Reject your evidence - The chargeback moves to pre-arbitration, which is a last chance to resolve the dispute before the card brand makes a final decision.
• Notify us of a refund - Notify us if you issued a refund to the cardholder before you received the chargeback.

For more information about how to respond to a chargeback, go to Respond to a chargeback.