Understanding Chargebacks

 

 

What is a Chargeback?

A chargeback happens when credit or debit card customers dispute a transaction on their statement. They may file these disputes for a range of reasons, such as not receiving the product, receiving a faulty product, unrecognized charges, identity theft, or suspected fraud. When a chargeback is filed, it temporarily reverses the transaction, allowing the customer’s bank to investigate the validity of the claim.

 

What Happens if a Supporter Files a Chargeback on a Linno Fund Contribution or Donation?

Although rare, supporters on Linno Fund sometimes file chargebacks. Here’s what you can expect if a chargeback occurs on a contribution made to your campaign:

  1. The Supporter Files a Dispute: The supporter’s bank or credit card company is notified and begins investigating.
  2. Our Payment Processor Alerts Linno Fund: Upon receiving notice from the supporter’s financial institution, Stripe, our payment processor informs Linno Fund of the dispute.
  3. Linno Fund Notifies You: We put the disputed transaction “On Hold” on your campaign dashboard and notify both you and the supporter that the chargeback has been filed.
  4. The Financial Institution Investigates: The bank conducts a thorough review, which may take up to 75 business days. Linno Fund has no control over the outcome, as it is ultimately the financial institution’s decision.
  5. Chargeback Decision: After the investigation, the bank notifies the payment processor, who then updates Linno Fund on the resolution. The possible outcomes are detailed below.

 

What to Do if You Receive a Chargeback Notification

If you’re notified of a chargeback, reaching out to the supporter can be a helpful first step in resolving the issue. Here are some common scenarios and how to address them:

 

  • The Supporter Forgot About Their Contribution: If a friend or family member simply forgot about their support, remind them about your campaign, what you’re creating, and the impact they’re helping to make. If they still want to support you, encourage them to contact their bank and cancel the dispute.

 

  • The Supporter is Upset Due to Shipping Delays: Sometimes, delays can frustrate supporters who were expecting perks sooner. Being transparent about your progress and showing gratitude for their support can help address their concerns. If the supporter still insists on getting a refund, encourage them to cancel the chargeback so that you can process a refund directly and resolve the issue.

 

  • The Perk Did Not Meet Expectations or Arrived Damaged: If the supporter received a perk that was not as described, work directly with them to reach a solution. You might send a replacement or offer a refund to ensure they’re satisfied.

 

Possible Outcomes of a Chargeback

There are two primary outcomes when a financial institution resolves a chargeback:

  • The Charge is Upheld: If the bank deems the charge valid, the funds are returned to your campaign, and the contribution is restored in your campaign total. You’ll see this update on the Perks Claimed & Donations tab in your dashboard.

 

  • The Charge is Reversed: If the bank decides in favor of the supporter, the transaction is refunded, and the contribution amount will be removed from your campaign total. The refund status will also show on your dashboard under Perks Claimed & Donations.

 

Should I Ship a Perk If the Transaction is On Hold?

We recommend holding off on shipping any perks related to a transaction with a pending chargeback. If the chargeback is resolved in your favor and the funds are restored, you should then ship the perk as promised. If the chargeback is refunded, you are not obligated to ship the perk.

 

 

What if the Perk Has Already Been Shipped?

If a chargeback is filed on a contribution for which you’ve already shipped a perk, contact the supporter directly. Providing them with proof of shipment can clarify any misunderstandings about delivery times and may encourage them to cancel the dispute. However, keep in mind that the decision ultimately lies with the financial institution, which may still choose to resolve the dispute in the supporter’s favor.

 

 

A Part of Running Your Campaign

Chargebacks can happen occasionally during a campaign. By understanding the process and staying proactive with your supporters, you can handle chargebacks effectively and focus on delivering a positive experience for all.