Guide to Chargebacks

What is the chargeback process?

If a cardholder sees a transaction on their card that they have not made, or if they were charged an incorrect amount, they can dispute that transaction with their bank or financial institution. If the cardholder’s bank feels the dispute is valid, the transaction in dispute is reversed from your merchant account and refunded to the cardholder. This process, and ultimately the reversal of the payment is called a chargeback.

How does the chargeback process work?

Step 1. A dispute is raised by a cardholder
Step 2. Their bank will issue a chargeback
Step 3. We’ll contact you and ask for some information
We will send you a notification via letter and/or email¹, to let you know that one of your transactions has been disputed. In the notification we’ll request some documentation like the:

terms and conditions of the initial sale

order form, invoice or other sales record

signed delivery receipt or other confirmation of delivery

correspondence (if any) from the cardholder.

We may also request additional supporting documentation. Please reply promptly within the timeframes specified in your chargeback notification.
Step 4. The dispute will be assessed

Once we have all the documentation we’ll assess whether we have enough evidence to challenge the chargeback. We will lodge all relevant information provided by the merchant with the card schemes (Visa, Mastercard or eftpos). The final decision will be made by the card schemes.

If you disagree with the assessment or outcome of the chargeback, contact our Merchant Chargebacks team on 1300 650 977 (8:30am-4:30pm Mon-Fri and 7:30am-3:30pm Sat & Sun) or by email at merchantchargebackssgb@westpac.com.au. You will need to provide further evidence to support your case, like the information we ask for in step 3.
Step 5. An outcome will be reached

There are two possible outcomes from the assessment:

1. The chargeback is ruled in favour of the customer – if the request is determined as being valid, the transaction amount will be debited from your settlement account and a chargeback fee may also be applied to your merchant settlement account.

2. The chargeback ruled in your favour – If the card schemes determine the chargeback is not valid, the transaction amount will not be debited and no charge will be applied to your merchant settlement account.

Why do chargebacks occur?

Here are some of the common reasons for chargebacks.

A customer doesn’t recognise the transaction
A transaction was fraudulent
A transaction was processed more than once
The incorrect amount was charged
The goods or services have not been received
A credit or refund was not processed
A sales receipt was changed without the customer’s authorisation.

How can I prevent chargebacks from occurring?

There are a few things you can do to help reduce the risk of chargeback requests:

Follow the rules. Always follow the terms of your merchant agreement for processing transactions and retain proof for all transactions for at least 18 months.
Keep detailed records. Keep detailed records showing that your customer has received the goods and services they paid for.
Get a delivery receipt. Always deliver goods or services as advertised and get a confirmation that goods were received by the actual cardholder.
Reduce refund fraud. Only refund to the same card that was used to make the purchase. Do not refund with cash or cheque if a purchase was made on a card.
Use a familiar name. Use a business or company name that is recognised by your customers – and matches the name on your transaction receipts.
Promptly resolve disputes. Be proactive and communicate clearly with your customers when there is an issue.

Chargeback FAQs

Why shouldn't I just refund the customer?
Who runs the chargeback process?
A credit card is issued by a cardholder’s bank or credit union, but the credit card schemes like Visa, Mastercard and eftpos set the rules around chargebacks. The card schemes issue chargeback rules for merchants, cardholders, and banks to ensure that chargeback processes are applied consistently. The schemes outline the chargebacks that are automatic and the ones you can dispute.

Download the Visa chargeback guidelines

Download the Mastercard chargeback guidelines

Download the eftpos chargeback guidelines
Do I get the opportunity to challenge all chargebacks?
Some chargebacks can be challenged. It’s important to familiarise yourself with the chargeback guidelines set out by the schemes. If you are unable to provide satisfactory evidence to challenge the chargeback, the dispute may become an automatic chargeback and your merchant bank account may be automatically debited. The schemes outline the chargebacks that can be challenged.

Download the Visa chargeback guidelines

Download the Mastercard chargeback guidelines

Download the eftpos chargeback guidelines

If you would like to challenge a chargeback, please contact our Merchant Chargebacks team on 1300 650 977 (8:30am-4:30pm Mon-Fri and 7:30am-3:30pm Sat & Sun) or by email at merchantchargebackssgb@westpac.com.au.
Will I be notified that money is being taken out of my account?
What about manually keyed transactions?

You should be careful when processing manually keyed transactions for online and mail or telephone orders (also known as MOTO) as these carry a higher chargeback risk. Be fraud aware. A common technique used by fraudsters is to present a stolen card or stolen card numbers and claim the original card is 'damaged’. Learn more about how to avoid and respond to fraud and scams.
How will I be notified of a chargeback?
How long should I keep my receipts?

Call the Merchant Helpdesk

1300 650 977

8:30am-4:30pm Mon-Fri and 7:30am-3:30pm Sat & Sun

Call the Merchant Helpdesk

1300 650 977

8:30am-4:30pm Mon-Fri and 7:30am-3:30pm Sat & Sun

Important Information

1. We will email you where we hold a valid email address for you. A condition of your merchant facility is to ensure that you provide St.George Bank with a valid email address.

St.George Bank does not determine the scheme rules and regulations regarding Visa, Mastercard, eftpos or UnionPay purchases. All banks/ financial institutions are governed by scheme rules and regulations.

The nature of the dispute and the type of chargeback will greatly influence what can be done about defending chargebacks. Please also note that any supporting documentation must be provided in a timely manner and if we determine that the evidence provided is insufficient, it may result in a chargeback.