Understand and prevent chargebacks

This article explains what a Chargeback is, how it affects your settlements, and the steps you can take to dispute or prevent them. 

What is a Chargeback?

A Chargeback happens when a customer (the cardholder) contacts their bank to dispute a card payment they made to your business.

This can be because they do not recognise the transaction, they say they did not receive the product or service, or they claim the payment was unauthorised.

The customer’s bank sends this dispute to the card network (for example, Visa or Mastercard), which then passes it on to Teya. At that point, we notify you and give you a chance to respond.

What happens when a Chargeback is raised?

When a Chargeback is raised against one of your payments, this is what happens:

1. Customer disputes the payment
   The customer contacts their bank to question or dispute a card payment to your business.
2. Bank and card network review
   The customer’s bank creates a Chargeback and sends it through the card network (e.g. Visa or Mastercard) to Teya, as the acquiring bank.
3. Funds are deducted from your Settlement
   When a Chargeback is raised, the disputed amount is temporarily taken out of your Settlement and held by the card network while the case is reviewed. During this time, the money is not paid to the customer and is not kept by Teya.
4. Decision is made by the card network
   • If the decision is in your favour, the disputed amount is added back to a future Settlement.
   • If the decision is not in your favour, the disputed amount is paid to the customer’s bank.
5. You are notified by email
   We send an email to your registered business email address with the details of the Chargeback, including:
   • The transaction amount
   • The reason for the Chargeback
   • The deadline for you to respond (usually 7 days).

You can then decide whether to accept the Chargeback or dispute it by sending supporting documents within the given timeframe.

Can I dispute a Chargeback?

If you have evidence that the transaction was valid, you can challenge the claim.

1. Check the deadline 
   You must respond by the date shown in your notification email. Late responses are automatically rejected by the card networks.
2. Gather evidence 
   Collect documents that prove the customer participated in the sale. Useful evidence includes:
   • Proof of delivery (tracking numbers or signed notes).
   • Invoices or receipts.
   • Emails or chat logs showing the customer was satisfied.
3. Submit your response
   Reply to the notification email with your evidence attached. If the card issuer accepts your evidence, the disputed funds will be returned to your Account Balance.

Are there any fees?

Each Chargeback incurs a £20 processing fee to cover the administrative cost of the dispute. It applies to every Chargeback you receive, even if you successfully win the dispute later.

How can I prevent Chargebacks?

You can reduce the risk of disputes by following these best practices:

• Use 3D Secure (3DS): This security feature asks customers to verify their identity during online payments. It is the strongest protection against "unauthorised transaction" claims.
• Check your billing name: Ensure the business name on your customers' bank statements is clear and recognisable.
• Keep clear records: Save detailed receipts and delivery confirmations.
• Be clear about policies: Display your return and refund policies clearly on your website and at checkout.
• Process refunds quickly: If a customer asks for a valid refund, process it promptly. A satisfied customer is less likely to go to their bank.
• Communicate: Keep customers informed about shipping delays or changes to their order.