CHARGEBACK GUIDE

www.globalpaymentsinc.co.uk 02 | 03

This step by step guide UNDERSTAND WHAT A is designed to help you if you ever receive a CHARGEBACK IS AND WHY chargeback whilst taking IT HAPPENS card with A chargeback is a transaction that has been disputed us. You will also fi nd by the cardholder or card issuer and returned to us. out about some of the When a chargeback is received from a card issuer, more obvious reasons the debit for the amount of the disputed transaction is also received. chargebacks happen and If a cardholder or the Issuer disputes A chargeback could happen for a variety why they sometimes a transaction, they may question its of reasons, and some of the more validity and raise a chargeback. We’re common are listed below: can’tcan’t bebe ddefended.efended. obliged to advise you of the details so • Fraud, where the transaction was that the Issuer may make a decision completed without the genuine based on all the details placed cardholder’s participation or authorisation. before them. We’re also obliged to • Authorisation related, such as the debit your account for the disputed transaction was completed without the transaction during the . required authorisation or authorisation To enable us to process card was declined. transactions, we must be a member of • A processing error which could be a the card schemes (MasterCard and Visa) duplicate processing of a transaction and we must abide by the rules and for example. regulations they have created. When • Cancelled/returned goods or service, you sign your agreement with us, you where the cardholder has cancelled agree to abide by these terms as well. an order or returned goods but hasn’t Each chargeback has specifi c rules, received a refund. This could be regulations and time limits which because it hasn’t been processed or we must adhere to. These are set by the refund has not been credited to MasterCard and Visa and infl uence the the same cardholder account that was actions we are able to take when dealing originally debited. with chargebacks. 04 | 05 Global Payments - Chargeback Guide

How Is A ‘Request for We Will Let You Know If Information’ Different? You Get A Chargeback

A Request for Information (RFI) We will notify you in writing if you get happens when a cardholder or card a chargeback, before we apply the debit issuer queries a transaction, but the to your account. Whether we can defend debit amount for the transaction is the chargeback depends on whether not sent. It’s purely a request for the the transaction has fully complied with transaction information. the rules set up by MasterCard or Visa. We make a reasonable attempt to We will write to you and ask for notify you before applying the debit, copies of your transaction documents however it may need to be applied when we receive an RFI. Please be prior to the notifi cation. So you may aware that, if we do not receive the fi nd that the transaction is taken from requested documents from you in the your account before you have received time requested, we may later receive a notifi cation from us. chargeback that we are unable to defend.

We make a reasonable attempt to notify you before applying the debit, however it may need to be applied prior to the notifi cation. So you may fi nd that the transaction is taken from your account before you have received notifi cation from us. 06 | 07 Global Payments - Chargeback Guide

What To Do If You Get The Result

A Letter If your response enables us to defend the chargeback, we’ll credit your bank If you receive a chargeback or RFI account whilst we attempt to defend letter from us, you must return all the chargeback. If the card issuer still requested information within the continues with the chargeback, we’ll timescale outlined in the letter. Failure notify you. to do this may prevent any further action in defending your chargeback. If your response doesn’t enable us to defend the chargeback, we’ll notify you in writing why and the debit The Defence previously applied to your will remain. Once your response is received, we’ll review it to see if it is suffi cient to It is important to note that, despite enable us to defend the chargeback, in every effort made by us to defend accordance with the Rules. your chargeback (if we are able to do so based on Card Scheme Rules), the responsibility to pursue a chargeback remains with the Issuer and not us.

If you receive a chargeback or RFI letter from us, you must return all requested information within the timescale outlined in the letter. 08 | 09 Global Payments - Chargeback Guide

Why Am I Seeing Chargebacks COMMON QUESTIONS WE 01 For My Online Payments? SEE ABOUT CHARGEBACKS IfIf you are takintakingg payments where the card or carcardholderdholder iiss not ppresent,resent, tthenhen yyouou mamayy bbee lliableiable for the charchargebacks.gebacks. The responsibility is We’re asked a lot of questions about chargebacks, wwithith you to ensure tthehe iiss bbeingeing mamadede byby tthehe genugenuineine carcardholder.dholder. and we know that they can be ffrustrating.rustrating. Not all We highly recommend that if you are taking charchargebacksgebacks can be defended and it is essential online ppayments,ayments, yyouou should include 3D that yyouou ensure that the rules set out bbyy the CCardard secure services such as Verifi ed byby Visa and MasterCardMasterCard SecureSecureCode,Code, where yyourour customer SchemesSchemes are ffollowed.ollowed. can authenticateauthenticate tthemselveshemselves as tthehe ggenuineenuine card holder. This adds an extra lalayeryer ooff securitsecurityy We have put togethertogether some ooff ofof reasons, and whilst we do everythingeverything andand cchargebackhargeback protectprotectionion to your ononlineline tthehe more common iissuesssues raraisedised we can to supportsupport our customers, we areare payments,payments, to hhelpelp yyouou pprotectrotect yyourour bbusiness.usiness. about charchargebacksgebacks for you. This is obligedobliged to abide by CardCard Scheme Rules by no means an exexhaustivehaustive lilistst as whenwhen handlinghandling every chargeback.chargeback. charchargebacksgebacks are raised fforor a variety

IfIf yyouou are takintakingg ppaymentsayments wherewhere tthehe carcardd oorr cardholdercardholder iiss not ppresent,resent, thenthen yyouou mamayy be liable fforor thethe chargebacks.chargebacks. 10 | 11 Global Payments - Chargeback Guide

Why Is Global Payments 03 Unable To Defend My Chargeback?

Not all chargebacks are defendable. If you don’t have all the supporting materials that we need, then we’ll be unable to defend your chargeback. Or if we don’t receive the documents in time, reduces our chances of defending the chargeback. It’s also wise to note that, just because the payment has been authorised at the point of purchase, does not guarantee the payment. Taking all of the necessary steps at the time of purchase may still not ensure that you won’t get a chargeback on it. The card could be fraudulently used but not yet reported, for example.

The Payment Was 02 04 Authorised - Why Is It Being Disputed?

A transaction authorisation cannot verify that the genuine cardholder is I Am Getting A HiHighgh conducting the transaction or guarantee that payment. Authorisation checks that Number Of Chargebackshargebacks at the time of the transaction, the card When I Am PPostingosting isn’t reported lost or stolen, and that Goods To Customersstomers And the genuine cardholder has suffi cient funds available. They Say Theyey Haven’t Received Them?em?

If you’re seeing a highgh number ooff chargebacks from goodsoods not beinbeingg delivered, then optingng to use ‘Si‘Signedgned For’ mail when postingting goods can help reduce this issue. 12 | 13 Global Payments - Chargeback Guide

If The Transaction Was 05 Fraudulent, Then Why Did Global Payments Allow It To Go Through?

As mentioned, a card used for a fraudulent transaction may not have been fl agged as being lost or stolen at the time of purchase. Or the card details may have been scammed and the genuine cardholder is unaware It’s only when the card that a counterfeit card is being used. has been fl agged as lost/ In these cases, the cardholder’s bank and Global Payments are not aware at stolen, or the counterfeit the time of the transaction that there’s has been identifi ed, that anything criminal happening with the card and payments continue to go the payment can be through as usual. stopped and you are made It’s only when the card has been fl agged aware with a notifi cation as lost/stolen, or the counterfeit has on your terminal. been identifi ed, that the payment can be stopped and you are made aware with a notifi cation on your terminal.

Why Can The Cardholder 06 Have Their Money Back And Still Have The Goods?

When a cardholder and a merchant are in dispute in some goods-not-as- described cases, the Card Scheme Rules state that the Cardholder must make the goods available to you to collect. However if you are in dispute and do not collect, arrange collection or refuse to collect, then at this point the cardholder has both the goods and the money. You must ensure that you arrange to collect your goods should this dispute arise. 14 | 15 Global Payments - Chargeback Guide

Why Has It Takenen SSoo Long 07 For The Chargebackback To Be Raised? STILL NEED FURTHER Maybe the cardholder hasas not notnoticediced a payment has been madede agaagainstinst ttheirheir account or has taken a whilwhilee to vviewiew INFORMATION? their accounts, during whiwhichch an ununknownknown payment has been fl agged.ed. This is more common with fraudulentt ttransactionsransactions which can take time to bbee iinvestigated.nvestigated. We hopeho this guide has been helpful. In the vast majority of cases,ases, rerequestsquests fforor If yyouou still need further information, documentation can be receivedeceived up to 13 yyouou ccana refer to the ‘Know The Risks’ months after the transactionction hhasas beebeenn ddocumentocum and the chargebacks section debited. Make sure that yyouou are aableble on papageg 66 in the ‘Card Processing to retrieve documents easily,asily, andand tthathat GGuide’,uide’ which you should have received adequate information is stored securelsecurely.y. iinn yyourou welcome pack. Alternatively tthesehese ddocuments can be found in the CustoCustomerm Centre area of our website, The Chargebackk OOperatorsperators secursecurelye accessed from the homepage 08 Do Not Understandand MMyy www.www.globalpaymentsinc.co.ukg Business! TheThe rrulesu from the Card Schemes areare coconstantly changing to keep up The type of business you’reou’re in has no with nnew technologies, customer bearing on the chargebackback system. paymentpayme preferences and the evolving The rules for taking cardd payments and threatsthreats to businesses. This guide is a the associated chargebackack rurulesles are snapshotsnapsh in the world of chargebacks, set out by the Card Schemes.emes. It’s yyourour andand wwhilst we’ve tried to ensure that responsibility to ensuree yyouou ooperateperate thethe ininformationf is as up to date as within these rules. Workingking wwithinithin tthehe possible,possib things may change. rules ensures that you hhaveave tthehe bbestest possible chance of eitherer avoidiavoidingng or successfully defending a chargeback. Global Payments is HSBC’s preferred supplier for card processing in the UK. Global Payments is a trading name of GPUK LLP. GPUK LLP is authorised by the Financial Conduct Authority under the Payment Service Regulations 2017 (504290) for the provision of payment services and under the Consumer Credit Act (714439) for the undertaking of terminal rental agreements. GPUK LLP is a limited liability partnership registered in England number OC337146. Registered Office: 51 De Montfort Street, Leicester, LE1 7BB. The members are Global Payments U.K. Limited and Global Payments U.K. 2 Limited. Service of any documents relating to the business will be effective if served at the Registered Office.

Issued by Global Payments, 51 De Montfort Street, Leicester, LE1 7BB. GP416