A POS chargeback happens when a customer asks their card issuer or bank to reverse a payment they made to you, instead of contacting you directly for a refund.
Once a chargeback is raised, the issuer opens a dispute and the disputed amount is immediately withdrawn from your account while the case is being reviewed.
A POS chargeback is not a refund, and it is not related to your POS rebate. A refund is something you choose to process yourself. A chargeback is initiated by the cardholder's bank.
To challenge a POS chargeback, you must always provide supporting evidence. The type of evidence required depends on the chargeback reason code provided by the issuer.
Why customers raise POS chargebacks
Common reasons include:
The customer does not recognise the transaction on their statement.
The customer claims the goods or services were not received.
The customer claims the goods or services were not as described.
The customer believes they were charged twice or charged the incorrect amount.
The customer reports that their card was used fraudulently.
What happens to the money?
When a POS chargeback is raised:
The disputed amount is immediately withdrawn from your account.
You will receive a compliance request from us asking you to provide the required supporting evidence.
Once your evidence has been submitted to the card issuer, the disputed amount is temporarily credited back to your account while the issuer reviews your defence.
The issuer then reviews all information provided.
If the issuer:
Accepts your defence, or
Does not respond within the required timeframe,
the case is considered closed in your favour and the funds remain with you.
If the issuer rejects the defence, the chargeback is upheld and the disputed amount is permanently deducted.
A POS chargeback is not considered final until the dispute process has completed, which can take up to 120 days depending on the card scheme and dispute type.
If your available POS settlement is not enough to cover the disputed amount, this will result in a negative balance. Future POS settlements will automatically be used to recover the outstanding balance until it returns to €0.
POS Chargeback fees
As set out in our Terms and Conditions, a chargeback administration fee of €30 applies to every chargeback, regardless of the final outcome of the dispute. [Link: POS Terms and Conditions]
How can I reduce POS chargebacks?
You can significantly reduce disputes by following these best practices:
Ensure the business name shown on receipts and card statements is easily recognisable to your customers.
Always provide customers with a receipt.
Keep proof of delivery, collection, or completed services, especially for higher-value transactions.
Respond to customer complaints promptly and process refunds where appropriate. A refund is usually quicker, less expensive, and easier than defending a chargeback.
Received a chargeback?
If you receive a compliance request regarding a chargeback, please respond as soon as possible with all requested documentation.
The evidence required depends on the chargeback reason code, so providing complete and accurate information within the requested timeframe gives you the best chance of successfully defending the dispute.