Operating Instructions

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Merchant Operating Instructions: Chargebacks

Card transactions are sometimes disputed by the cardholder or the card issuing bank.  When this happens we may contact you requesting further information by sending a Request For Information (RFI) letter or, depending on the nature of a dispute, we may send a chargeback letter.  A chargeback means that the transaction is reversed and your account is debited.
 
If you are not able to supply information requested by us or in the timescales we specify then it is likely that an RFI may turn into a chargeback, as we will not be able to remedy the dispute on your behalf.

What if cardholders get in touch with you directly?

You and your customer may come to an agreement to issue a refund but this will usually be prior to a chargeback being raised. If you wish to make a refund after receiving a chargeback or an RFI letter you should contact our Helpdesk to discuss this as a response to the card issuer will still be required.

• If the customer just wants their money back under your returns policy, find out more in Refunds.
• Never give a refund for any other reason to the cardholder without checking with the Streamline Helpdesk.
• If you have received an RFI or chargeback letter, you must never make a refund to the cardholder without checking with the Streamline Helpdesk first.

• What is a Request For Information (RFI)?
• What to do if you receive an RFI letter
• Information to supply if you receive an RFI letter
• Secure record keeping
• What happens when there is a chargeback?
• Why chargebacks happen
• Disputing a chargeback

• What is a Request For Information (RFI)? 
• It’s when a card issuer or cardholder instructs us to ask you for details about a specific transaction. If this happens, we will send you an RFI letter asking you for the relevant transaction records.
  
  
  • A card issuer does not need a specific reason to ask for information about a transaction.
  • We will give you as much information as possible to help you trace the payment. This will include the transaction date, card number and transaction reference. The cardholder’s name and address will not be given, in line with the UK Data Protection Act.

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• What to do if you receive an RFI letter 
• If you receive an RFI letter, you must send us the information we ask for as soon as possible. You will have a set time to reply – it is very important to respond by the date given or timescales specified.
  
  
  • Response times are set by us to ensure there is sufficient time to provide a response to the card issuer within the timescales set by the card schemes.  As a result, we cannot give you extra time to respond
  • If you don’t respond or are late with your reply, a chargeback debit may be applied to your account.
  • If you have Streamline Online, you will receive an e-mail prior to receiving an RFI letter.

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• Information to supply if you receive an RFI letter 
• The more information you give us in response to an RFI letter, the more likely it is that we will be able to answer the card issuer’s query or defend your position. However, producing all the documentation you are asked for does not always prevent the card issuer making a chargeback.
  
  You should supply:
  
  
  • A copy of the invoice for the goods or services provided
  • Any documents signed by the cardholder
  • Any terms and conditions issued at the time of the sale, these should be signed by the cardholder
  • If the goods were delivered – evidence of delivery, these should be signed by the cardholder
  • For a rental – the rental agreement
  • For a refund – the refund voucher
  • For MOTO sales – a copy of the sales receipt or Mail Order Telephone Order schedule
  • For Internet/eCommerce sales – a copy of the source documentation showing all the data captured at the point of sale, including the card number. You may need to print screen images. If necessary, ask your payment service provider (PSP) to help
  • Any additional comments relevant to the transaction or dispute – particularly where the cardholder may have approached you directly and you should include details of the outcome of this approach.
  
  The transaction documentation should include:
  
  
  • Card number - 12- to 19-digit number across the centre of the card
  • Unless it is a PIN verified transaction, the cardholder’s signature (in both face-to-face transactions and transactions by post or fax).
  • Transaction amount
  • Transaction date
  • Your trading name and location
  • Card expiry date
  • Cardholder name and address (generally for Mail Order Telephone Order and eCommerce transactions)
  • Description of goods/services provided

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• Secure record keeping 
• Terminal receipts, paper vouchers and other transaction records are high-security items and access to them should be restricted. Keep your copy of all transaction records in a secure fireproof place for at least 18 months in case there is a query later. Your records should be stored in such a way that you can locate them easily without cardholder name or addresses as we will not give this, in line with the UK Data Protection Act. If you are not able to produce your transaction records when asked to, there may be a chargeback. Do not alter transaction records in any way. If there is a dispute, the cardholder’s copy will normally be taken as correct. After 18 months, make sure you dispose of all transaction records securely, in line with your Contract.
  
  

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• What happens when there is a chargeback? 
• A chargeback is a claim on your account to reverse a transaction that you have processed. If this happens, we will send you a letter explaining the reason for the chargeback. Find out more about why chargebacks happen.
  
  You may sometimes get a chargeback without an RFI. This can happen when it’s clear that the right process has not been followed – for example, if you have taken a payment above your floor limit without obtaining a valid authorisation code when required to.
   
  It can also happen for other reasons when, depending on the chargeback received, and the type of transaction, there can be no further recourse to or defence against the card issuer.  For example, a card not present transaction taken without cardholder authentication (e.g., verified by Visa or MasterCard SecureCode) will result in a chargeback being initiated without a previous RFI.
   
  Where there is a valid chargeback, Streamline will debit your nominated bank account with the value of the disputed transaction, quoting the same unique reference number as the chargeback letter. You are responsible for making sure sufficient funds are in your nominated bank account. Failure to do so could result in your card processing facility being withdrawn.
   
  Your account will be debited within 14 days from the date on the chargeback letter.

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• Why chargebacks happen 
• Here are some of the most common reasons for chargebacks, but this is not a full list. If you are not sure about the reason for a chargeback, please contact the Helpdesk and select the chargebacks option.
  
  Disputed payments
  Some common reasons for disputes include:
  
  
  • The cardholder claims someone was using the card without his or her knowledge. It could have been stolen and used fraudulently – particularly for MOTO and eCommerce transactions
  • There is a processing error, such as the wrong card number or wrong amount was keyed
  • The cardholder disputes some other aspect of the transaction, for example late delivery, unsatisfactory goods or services, or the wrong size/colour/price. Further information about goods and services disputes.
   
  Wrong or suspect card details
  There is also a high risk of a chargeback if there was a mistake when the transaction took place. Other common problems are:
  
  
  • The card is not valid – for example it is out of date
  • Wrong signature or no signature
  • Details on the terminal receipt or voucher don’t match the card – i.e., the embossed details on the card do not match the details on the electronic receipt or the details have been entered incorrectly by hand (Primary Account Number (PAN) key entry).
   
  Wrong process
  
  
  • Your customer has been billed twice for the same sale.
  • The transaction was by PAN key entry, but a separate imprint and signature was not taken on a back-up paper voucher.
  • The sale required authorisation but it was not obtained.
  • An authorisation call was made, but the sale was not authorised.
  • Two or more transactions have been made on one card, for one sale in order to avoid authorisation or referral – known as a 'split sale'.
  • You have made a sale not covered by your contract with us – remember you need a separate agreement to make MOTO or eCommerce sales.
  • An electronic transaction has been stored on your terminal but not sent through to Streamline within three working days (unless this has been agreed in advance).
  • You have keyed card numbers manually or used paper vouchers when your terminal was working.
  • The transaction was not correctly authorised.
  • You have processed a card that is not covered by your contract with us.
  • You have taken a non-UK-issued Maestro card and keyed in the number by hand.
  • You have taken an Electron or non-UK-issued Maestro card and used a paper voucher.
   
  A problem with your response to an RFI
  
  
  • You have not replied to an RFI letter within the given timescales.
  • You have replied to an RFI letter with illegible or incomplete documentation.
   
  A problem with a paper voucher
  
  
  • The signature on the voucher is missing, impossible to read, or doesn’t match the card.
  • The voucher supplied doesn’t match the customer’s voucher.
  • The voucher is impossible to read.
  • The voucher is missing details, such as the date, amount or signature.
   
  A problem with mail order
  
  
  • You have not kept any paperwork signed by your customer that proves the goods were delivered correctly.
   
  A problem with service or changes to specification
  
  
  • You have not obtained confirmation from the cardholder that a service has been completed to their satisfaction.
  • There have been changes in the price or specification and you have not obtained the cardholder’s signature in agreement.
  
  Other problems
  
  
  • In some other way, you have gone outside your Contract with us.
   
  Further information about goods and services disputes 
   
  These types of chargeback disputes can be difficult to defend and therefore if a customer contacts you with a dispute you should retain accurate records of what is discussed or agreed.  Where possible, ask the customer to put the complaint or query in writing/e-mail and have the customer agree in writing to any resolution agreed, as proving the content of a telephone conversation at a later date is virtually impossible, and card schemes do not accept recordings or telephone conversations as evidence.
   
  It is important to be aware that the cardholder does not always have to physically return the goods to you for a chargeback to be correctly raised.  MasterCard dispute resolution rules allow for goods to be ‘tendered’ for return, i.e., the cardholder just has to offer them for return.
   
  Please also be aware that the use of 3D Secure protects you from fraud-related chargebacks, but it does not remove the requirement for goods and services to be provided as agreed and therefore you can still receive goods and service disputes and you will still need to respond to any requests for information.
   
  If the post is disrupted
  If there is a problem with the post, your letters may be delayed, but will be sent to you as soon as possible.  Even if this written explanation is late reaching you, the chargebacks will be debited from your account as usual.

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• Disputing a chargeback 
• You can dispute a chargeback that has been applied to your bank account. You will need to provide information to prove that the transaction was authentic. Streamline will consider any information you can provide proving that the transaction is authentic. However your account will only be credited if the evidence provided meets the rules set by the card schemes.
  
  Even if all procedures have been correctly followed and documented, this does not guarantee that you will succeed in disputing a chargeback. The technology we use is designed to ensure that chargeback enquires are resolved efficiently with minimum disruption to your business.
   
  Terminal receipts, paper vouchers and other transaction records are high-security items and access to them should be restricted.  Keep your copies of all transaction details in a secure fireproof place for at least 18 months in case there is a query later.  If you are not able to produce records when asked to, there may be a chargeback.  Do not alter transaction records in any way.  If there is a dispute, the cardholder’s copy will normally be taken as correct.  After 18 months, make sure that you dispose of all transaction records securely, in line with your Contract.
  
  

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