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Guide to the chargeback process

If you process credit card transactions for long enough, sooner or later you're likely to encounter a chargeback. The Lightspeed Payments team will guide you in taking preventative steps and in handling any chargebacks that come your way.

To help you understand the typical chargeback process you're likely to experience, let's start with the key players:

  • Cardholder: The owner of the credit card (your customer).
  • Merchant: The owner of the business that processed the credit card (you).
  • Issuer: The bank that issued the credit card to the cardholder (your customer).
  • Acquirer: The bank that acquires payments for the merchant (you).
  • Credit card network: The credit card brands (Visa, Master, Amex, Discover) that determine the guidelines of their chargeback process.
  • Lightspeed Payments team: The Lightspeed Support agents responsible for facilitating chargeback communications between the merchant and the acquirer.

Now that you know the key players, let's breakdown the steps in a typical chargeback process. We use the term typical chargeback process because the process can vary depending on the banks involved. In any case, you can lean on our Lightspeed Payments team to guide you through the process.

  1. The cardholder files a chargeback with the issuer.
  2. The issuer communicates the chargeback to the acquirer. At this point, the merchant is debited for the disputed amount and the chargeback fee. The chargeback fee is non-refundable.
  3. The acquirer communicates the chargeback to our Lightspeed Payments team.
  4. Our Lightspeed Payments team contacts the merchant to advise them of the chargeback.
  5. The merchant either accepts the chargeback or works in conjunction with the Lightspeed Payments team to dispute it, sending evidence as required.
  6. Our Lightspeed Payments team communicates the merchant's response to the acquirer.
  7. The acquirer communicates the merchant's response to the issuer.
  8. The issuer reviews the chargeback dispute and determines whether the cardholder or the merchant won the dispute. If the merchant won the dispute, they are refunded for the disputed amount. If the merchant lost however, they must absorb the disputed amount.

This overview of the chargeback process is provided for your information, but rest assured that the Lightspeed Payments Team will be with you every step of the way for any chargebacks you incur. Please don't hesitate to contact them should you have any questions.

NOTE: The retrieval request process is essentially the same as the chargeback process. The biggest difference is that the merchant is only debited the disputed amount and chargeback fee if the retrieval requests results in a chargeback. From the merchant's perspective, they're also more rare in comparison to chargebacks seeing that the issuer and acquirer typically resolve the request without their involvement and only involve them if the retrieval request results in a chargeback.

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