Chargeflow’s Alerts system is designed to help you proactively prevent chargebacks. When we receive an alert indicating a customer dispute, we automatically initiate a refund to stop it from escalating into a formal chargeback. In almost all cases, this process is successful, and the chargeback is prevented.
However, in very rare instances, a refund may not stop the chargeback from being filed.
How Can This Happen?
There are two main scenarios where this may occur:
Processing Delays: Sometimes, there’s a delay in communication between the payment processor and the issuer bank. If the refund hasn’t yet registered on the issuer's system, they may proceed with filing a chargeback before the refund is recognized.
Issuer Discretion: The issuer bank may decide to move forward with a chargeback despite the refund, especially if it deems it necessary to protect the cardholder.
In these cases, the chargeback overrides the refund, and the refund may be canceled. It’s important to understand that refunds and chargebacks cannot be processed simultaneously for the same transaction.
Here is an example:
June 4 - An alert is received, and a refund is automatically initiated.
June 5 - A formal chargeback is filed by the issuer bank.
A few milliseconds afterwards, the refund attempt failed due to the chargeback being processed (“Unable to refund $41.34 USD”).
Note - This does not apply to alerts marked with Verifi RDR. If the alert includes a status like Dispute Lost or Chargeback Lost and is marked with “Verifi RDR”, this indicates that a refund was successfully processed and the chargeback was prevented (click here to learn more about Verifi RDR).
If you’ve noticed that a refund didn’t go through and a chargeback was filed instead, please send the alert ID and transaction ID to hello@chargeflow.io. Our team will gladly review the case and issue a credit if applicable.