How to handle a chargeback request initiated by my customer to their bank

Pencil will then send out an automated email notification to inform you of the relevant transaction details pertaining to the chargeback request your customer has initiated and will also send out a follow-up email to inform you about the chargeback request.

You will then be asked to contact your customer to advise if it is a valid transaction and if valid, to cancel the chargeback.

An important note is to inform your customer that once they receive a confirmation from their bank that they have cancelled the chargeback request to forward you a copy of their email they receive from the bank.

This helps challenge the chargeback and ease out the process.

We do our best to provide all the necessary supporting information regarding the charge. However, there are times when, despite our efforts, the chargeback is resolved in favor of the customer, allowing them to receive their funds back.

In such cases, the funds are then reclaimed from Pencil. Since Pencil has already disbursed those funds to you (which may have been some time ago), we will need to recover that amount from you.

You will then have the opportunity to recover the funds from your customer, as they have already received the goods sold. If the goods have been returned, then no further action is necessary on your part.

To sum it up, here are the relevant information regarding the chargeback process:

1. When a customer requests a chargeback from their card/bank they receive the funds back into their account almost instantly (within a day or two) while the chargeback process is run.

2. We are informed of the chargeback and then we go through our process of verifying the transaction was a valid transaction, contact our customer to reach out and ask their customer to cancel the chargeback request with their bank as the transaction is valid.

3. This process can take weeks and sometimes months before it is finalised.

4. Once the chargeback is finalised (eg. either successfully challenged or lost) the following happens:

   1. If we are successful then there are no changes to the transaction or disbursements and the customer will have the funds automatically taken from their account. No further action required by anyone.

   2. If lose the chargeback appeal. They customer already has their funds and OPACK has the disbursement, so we need to recover the funds from OPACK, who then needs to recover the funds from the customer.

5. We don't recommend applying a credit to the customer as the chargeback process hasn't been completed and the most likely outcome is we will be successful and no further action is required.

6. If a credit has been applied to the customer and we win the chargeback, then the credit can be deleted (unless the customer paid again by EFT and a credit is warranted for a double payment).