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What happens after a chargeback dispute is finalised?

You may encounter a scenario when your customer will reach out to you about money taken from their account in relation to a prior chargeback dispute.

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. How long until a chargeback dispute is finalised?

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

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

      1. Chargeback is successfully challenged :

        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. Chargeback dispute is lost:
        1. If we lose the chargeback appeal. They customer already has their funds and you (your company) has the disbursement, so we need to recover the funds from you, who then needs to recover the funds from the customer.

  4. Do you need to apply a credit to the customer for a chargeback dispute?
    1. 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.
  5. What if a credit has already been applied to the customer and we win the chargeback dispute later?
    1. 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),
    2. **Note: What if the customer had paid again by EFT for the same invoice?
      1. See 6.a, If the customer paid again by EFT then a credit is warranted for a double payment.

The customer's bank decides the outcome of any chargeback dispute that your customer initiates through their bank .Once the chargeback is finalised (successfully challenged ) 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 however, in this case where the customer had made another payment via EFT, please take note of the below information:

    1. Why was my customer charged again after the chargeback dispute was successful?
      1. In this case where your customer has mentioned that money was taken from their account at a later date after the dispute has been finalised and deemed successful, this process was done automatically (the bank will retrieve the amount from their bank account automatically).

2. If a credit has not yet been applied to the customer and we win the chargeback, then the credit can be applied to this customer only if the customer paid again by EFT then a credit is warranted for a double payment.

    1. In this case where your customer has mentioned that money was taken from their account at a later date, you can apply a credit for this customer IF they had paid for the same invoice again by EFT

Why can't I find any payment in relation to the funds taken from my customer's account in relation to this chargeback dispute?

You won’t see the chargeback come from the customer as it is not related to your account but rather, it is related to the customer’s bank account.

The chargeback recovery from the bank doesn’t touch your accounting software or Pencil.


The successful outcome of the chargeback dispute may trigger an amount toe be taken from the customer's account (automatically) if the chargeback dispute is successful and finalised.


You can apply this as a credit on your accounting software in the case where they had made another payment via EFT. If not, there is no further action required.