This article will show a list of frequently asked questions by ClubReady users in regards to Chargebacks. This is specifically for Full Service Clubs.
Q: I received a chargeback. What happens now?
A: Between 10-45 days after the dispute has been received, ClubReady will evaluate the chargeback claim. This timeline is dependent on the number of days the Issuer allows a response to the dispute. There are, however, some exceptions to this time frame. We may be required to respond sooner than 10 days, and may have more than 45. Generally, a 10–45 day is to be expected. Each Merchant is given as much time as possible to provide supporting documentation. If the case meets representment criteria, the Chargeback Team will gather the necessary documentation, creating a rebuttal to challenge the dispute. See
article “Reasons ClubReady Will Not Fight A Chargeback” for representment eligibility. A win/loss decision is typically made within 90 days of the representment date, but can take up to 180 days depending on the customer’s bank. If the case has exceeded 180 days, an escalation can be created with the Issuer. This means that’s they are required to provide a response within 5 business days, or the Merchant wins by default.
Q: Do I need to request for ClubReady to start the dispute / chargeback process?
A: Once a customer initiates a dispute, ClubReady is automatically notified. The club will
not need to make a request for ClubReady to start the process.
Q: What should I do if I do not want to pursue the dispute?
A: Cancel the invoice(s) associated with the chargeback(s). This will signal to ClubReady
that you wish to return the funds to the customer.
Q: Why is the client's payment profile deleted from the system?
A: After a chargeback has been received, authorization to bill has been revoked. The credit
or debit card will be automatically deleted from the customer's account to comply with
card network policy, and avoid the system drafting a payment profile associated with a
chargeback. The club will need to reach out to the customer to acquire a new payment
profile, or reobtain authorization to bill the card associated with the chargeback.
Q: Why wasn't I notified that a chargeback occurred?
A: Ensure that you are subscribed to receive chargeback notification emails.
Setup > Communication > Internal Reports > Chargeback Notifications. Chargebacks
are updated daily in the Refunds and Returns Report. To keep track of chargebacks in
your location, you will need to go to Reports > Sales > Refunds / Returns. You may
filter to just view Returns for a specific date range
Q: Why is the customer’s agreement in 3rd party collections?
A: Because 3rd party status is driven by the oldest past due invoice, the system will place
the agreement into collections if the disputed invoice is 90+ days past due. ClubReady
will not pursue the dispute if in 3rd party status during the evaluation window, to avoid
potential legal complications.
If the disputed invoice is already over 90 days past due, the agreement will enter
3rd party the day following the chargeback. If you would like ClubReady to pursue
the case, It must be removed from 3rd party before the evaluation window,
beginning at 10 days after receiving the chargeback,
To avoid having the account enter 3rd party during the evaluation window, it is
recommended that the agreement be cancelled to prevent the automatic placement into collections. After cancelling the agreement, ensure the invoice(s) associated with the chargeback(s) are reinstated. The invoice must be active in order for ClubReady to challenge the dispute.
Q: Why was the case lost?
A: Not having proper documentation (fully signed agreement, booking log, copy
of payment receipts and Invoices, etc.).
Not being upfront and honest about gym policies and rules. Miscommunication
is a common reason for chargebacks.
The card network’s policies may overrule the Merchant’s policies.
Even with all the appropriate documentation, the case can be decided in the
member's (or cardholder's) favor. The customer’s bank will make the final decision; ClubReady does not have control over the verdict.
Q: What is a Returned Payment Fee?
A: Return Payment Fees are created in the member's account when a charged
back/returned payment is reflected. This Return Payment Fee is for the club to collect
from the member and offset the Chargeback Fee imposed by ClubReady. ClubReady is
charged a fee from the bank when the customer initiates a dispute. ClubReady cannot
be liable for any actions taken by members against the club, and must impose a fee to
recover
Q: The disputed invoice was already refunded. How did this become a chargeback?
A: If the refund associated with the chargeback has been RELEASED, ClubReady will
provide the customer’s bank with proof that the refund successfully processed. The
funds will then be returned to the club. The Issuer may not have seen the refund coming
through, and allowed the customer to dispute the payment. If the refund associated with
the chargeback has DECLINED, the chargeback has broken the payment pathway,
causing the refund not to process. In this case, ClubReady will accept the chargeback in
lieu of the refund, returning the funds to the cardholder as the club originally intended.
Q: Can I refund the disputed invoice so the member will reverse their chargeback?
A: No. Disputed invoices become unpaid invoices and refunds can only take place on paid invoices. However, if the member contacts their bank and reverses the chargeback, the funds will be reimbursed to the club and the invoice will once again be paid. Only after the invoice is paid again will a refund be possible.
Q: What happens if a staff member accidentally marks a payment as a "Chargeback" instead of refunding back to the customer?
A: This happens very rarely but it would put the payment into Under Review status.
Fortunately, nothing happens to the payment and can easily be reversed by
contacting ClubReady support.
Q: Can ClubReady cancel a chargeback?
A: ClubReady cannot stop the chargeback process once it has started. We will need to
wait for the decision from the bank.
Q: My member states they called their bank and reversed the Chargeback Dispute. What does ClubReady need to credit my account?
A: If the member states they agree to the charge and requested their bank to stop the
dispute, a letter from the bank to the member will be issued. This official letter will
include a statement from the bank acknowledging the cardholder's acceptance of the
charge and that the account will be re-debited for the amount. This letter is sufficient
proof for ClubReady to send back to our bank and issue a credit for the charged back
payment to the club. A bank statement with proof of the rebill will also be accepted.
Q: How am I notified when a chargeback case is settled?
A: You can always check the status of a chargeback case by pulling a "Refunds and
Returns" report, located in the Report section of your ClubReady Site. The bank
normally updates the case within 90 days, but can take up to 180 days in review.
Q: How is Past Due Communications managed when there is a chargeback?
A: Past Due Communications cease when a chargebacks is initiated on member's account.
Q: Why would the chargeback evaluate the dispute sooner than the standard 10 days?
A: We are generally able to provide a 10 day grace period before we go in to evaluate the dispute claim. However, there are certain cases where the Issuer may require us to respond to the dispute within a restricted time frame. Due to this time restriction, on some rare occasions we may need to begin our evaluation prior to the standard 10 days.
Q: Do you have access to the emails that are sent out through Digital Stack?
A: Not at this time. Please upload any communication between the Merchant and cardholder via Digital Stack to the customer files.
Q: Our chargebacks are customers who pay their membership but don’t use the visits. Is it realistic we can win these chargebacks?
A: In these types of scenarios, there is a 60% chance in successfully reversing the dispute if the chargeback is not a recurring charge (i.e fixed term membership).
Q: What does "Represented" mean in the detail category under Refunds & Returns report?
A: Represented indicates that ClubReady has completed their evaluation, and is now waiting to hear back from the card issuer on a win/loss decision.
Q: Why does ClubReady not work with the studio management on crafting an argument against the chargeback? There is limited communication between CR and the studio management about these issues?
A: Any Merchant is welcome to add their input. This can be done by writing a short statement telling us your side of the story; uploading this into the customer files. ClubReady evaluates over 40,000 chargebacks per year, and must adhere to strict response timelines. In order to efficiently respond to each case in a timely matter, individually contacting each merchant is not possible. This is why we ask that all information pertaining to the case be ready for review 10 days after receipt of a chargeback.
Q: Why does CR not provide a verdict email to the club management. We need to keep referring to the Refunds & Returns report. It would be nice to get a note saying that a decision has been made in one direction or another.
A: This is a feature request that is currently in the works.
Q: So many of our chargebacks are due to the client not accepting our 31-day cancellation policy. Why does CR lose so many of these disputes despite it being clearly included in the contract they signed?
A: Although the current setup of membership agreements is strong, the contract is between the merchant and the cardholder; the Issuer is not contractually obligated to abide by the terms. They have their own policies, which will often times override the Merchant’s. For example, the 31 days cancellation policy. Visa has their own Core Policy regarding recurring charges cancellations. If the cardholder cancels the membership, the Merchant is no longer authorized to bill the Visa card, as authorization has been revoked. The merchant must find another means of payment for the final dues, or they must obtain authorization to use the Visa card associated with the account. A loss on this type of dispute does not mean that the customer does not owe you for the final dues. This only means that the customer’s bank will not provide the funds to cover the payment, due to their own policies.
Q: Will CR look through the entire member record? I have been told that you will only look at the attachments in the Agreement record in question.
A: Yes. Our analysts thoroughly review all areas of the customer profile.
Q: Does the chargeback defense team look at "Notes" in the subjects record as well as email and SMS messages?
A: Yes.
Q: How do you dispute a chargeback decision?
A: If a chargeback is lost, there is a $500.00 charge to enter arbitration. If this is something you would like to initiate, please reach out to our team.
Q: How do I see why we either win/loss a chargeback?
A: We are often times not provided with a response, as the Issuer is not obligated to provide us with one. If you have a specific case in question, we can attempt to investigate the reason.
Q: If an anonymous POS payment has been chargeback, will that return record show in ClubReady?
A: Yes it does! You can locate all Chargebacks, including from an anonymous transaction when navigating toReports > Sales > Refunds & Returns.