What is a Chargeback?

IN BRIEF
A chargeback occurs when a customer contacts their credit card issuing bank to dispute a transaction. The dispute is routed through the card network to iClassPro Payments, which then requests supporting documentation from the business to help challenge the claim. This article explains how chargebacks work, how merchants should respond, how to avoid future disputes, and how to adjust the family ledger in iClassPro after a chargeback.

Overview
Accessing the Feature
Step-by-Step Instructions
Troubleshooting & FAQs
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Overview

A chargeback happens when a customer disputes a transaction with their credit card issuing bank. The issuing bank contacts iClassPro Payments for information about the transaction, and iClassPro Payments reaches out to the business to request documentation that may help re-present the transaction to the bank.

Common reasons for chargebacks include:

Customer dissatisfaction with a purchase
Customer not recognizing the transaction
Customer not authorizing the transaction
Customer reporting the transaction as fraudulent

The dispute process—including timeframes and procedures—is governed by the credit card networks (Mastercard, Visa, Discover, American Express). iClassPro Payments re-presents the merchant’s case, but the card issuer ultimately determines the outcome.

The issuing bank provides a chargeback reason code, which describes the basis for the dispute.

Accessing the Feature

Chargeback notifications and details are managed outside the main iClassPro Office Portal workflow.

To access chargeback information:

Review the email sent to the address used for settlement summary notifications.
Visit the Merchant Portal at: https://merchantportal.iclasspro.com.
Locate chargeback details, reply-by dates, amounts, and documentation requests.

Step-by-Step Instructions

Understanding the Chargeback Process

For most transactions, cardholders have up to 120 days from the transaction date to dispute a charge. The typical process includes:

Customer disputes the transaction.
- Customer contacts their issuing bank.
- Card issuer provides provisional credit to the customer.
Merchant is notified of the chargeback.
- Chargeback amount is debited from the merchant’s account.
- Notification is sent to the merchant via email (sent to the settlement summary address).
- Chargeback details appear in the Merchant Portal.
- Merchant is charged a non-refundable $25 chargeback fee.
Merchant response options:
- Re-present
  - Merchant typically has 7–30 days to respond (depending on card network).
  - Merchant provides documentation to support the validity of the transaction.
  - Documentation is forwarded to the card issuer.
  - Card issuer has up to 45 days to respond.
  - If accepted, the chargeback is declined and the customer is charged again.
  - If not accepted, funds remain with the cardholder.
- Accept
  - Merchant may choose to accept the chargeback.
  - If no response is received by the reply-by date, the chargeback is automatically accepted.

Preventing Chargebacks

General best practices include:

Give excellent customer service and post return policies clearly.
- Encourage customers to contact the business before disputing a charge.
Use a clear DBA (Doing Business As) name customers will recognize.
- Contact iClassPro Payments if unsure how the name appears on statements.
Ensure the correct customer service phone number appears on statements.
- Helps prevent unnecessary disputes.
Swipe cards when possible.
- Provides stronger proof of authorization for in-person transactions.
Use Address Verification Service (AVS).
- iClassPro attempts to match the address automatically.
- Gateway settings can be updated to decline mismatched transactions.
Communicate with customers about their transactions.
- Visa recommends sending a billing reminder ten days prior for recurring transactions.
- Emailing receipts helps customers recognize charges.

Additional resources

Adjusting the Family Ledger in iClassPro After a Chargeback

Once a payment is connected to a chargeback, it cannot be voided or refunded within iClassPro.

To balance the ledger:

Delete the payment.
- Deleting preserves accuracy because iClassPro keeps a record of all deleted payments.
- Deleted payments continue to show on financial reports as existing between creation and deletion, along with any charges they were applied to.

For more information about deleted payments and reporting impacts, refer to:

Troubleshooting & FAQs

Why was I charged a $25 fee?
- Every chargeback includes a non-refundable $25 chargeback fee assessed by the card network and passed through to the merchant.
What happens if I miss the reply-by date?
- The chargeback is automatically accepted, and funds remain with the customer.
Can iClassPro overturn a chargeback decision?
- Card issuers make the final determination. iClassPro Payments can only re-present documentation on behalf of the merchant.
Why can’t I void or refund a payment tied to a chargeback?
- Once a chargeback is filed, the payment is locked. The correct way to adjust the ledger is to delete the payment.
Where can I see chargeback details?
- All details are available in the Merchant Portal and through the email notification sent to the settlement summary address.