This article and video will provide some basic information on how ClubReady will handle chargebacks for Fully Managed clients. As a fully managed client, you have the ClubReady team available to work the chargeback on your clubs behalf. The team will investigate the cause for the chargeback, gather documentation and present the case back to the processor to reclaim the funds lost.
Please Note:
- If you have any questions or concerns regarding a chargeback, you can contact our chargeback department via email at chargebackinquiries@clubready.com and someone will be happy to assist you.
- Did you know you can receive an email notification when a chargeback status has been changed? Learn how to set this up with our help article Email Notification For Chargeback Status Updates.
What is a chargeback?
If a member (or, more specifically, the cardholder) disagrees with a charge made to their credit card, they have the right to file a dispute, or chargeback, with the bank. This right is given to them by the card company. The bank creates a dispute case, takes the money from the club's account, and requests more information from the club as to the nature of the charge.
NOTE: ClubReady has no control over the chargebacks before they happen, and cannot prevent any money from being taken.
How does ClubReady process chargebacks?
The ClubReady Chargeback department receives reports from our bank daily regarding chargebacks. The analyst will mark each chargeback in the club, debit the dispute amount from the remit as well as a fee. ClubReady will create Past Due invoices and Returned Fee invoices in the member's account within the club. A Chargeback Notification Email will be sent to the address on file to receive these emails. You can opt in and update this notification under Setup > Communication > Internal Reports > Chargeback Notifications.
NOTE: As a club Owner, we recommend running a daily report for chargebacks and returns, which can be done under Reports > Sales > Refunds & Returns.
How much time do I have before ClubReady begins researching the chargeback case
If the payment method on file is a VISA, MasterCard or Discover credit card, you will have 10 business days to determine how to best handle the chargeback. If the payment method on file is an AMEX, you only have 5 calendar days. WE HIGHLY RECOMMEND the club contacting the member to resolve the dispute as soon as possible. The ClubReady Chargeback department has found the vast majority of chargebacks to be a simple miscommunication, and the club is able to quickly resolve any issues between them and the member. This also means the club potentially retains the customer, continues billing for services, and avoids negative feedback.
If communication with member does not resolve the dispute, please make sure all documentation is in the member's account and notes are up to date. It is better to have too much information than not enough. The ClubReady Chargeback department will evaluate the case, prepare the documentation provided, and send it back to the bank for a decision. Insufficient documentation can forfeit the chargeback, resulting in lost funds for the club.
What does ClubReady use to prove the member owes the money?
ClubReady uses several documents to prove the member/cardholder is responsible for the payment. Here are just a few examples:
- Fully Signed agreement, naming the cardholder as the responsible party.
- Signed freeze / cancellation form (if applicable).
- Check In History (if applicable).
- Signed checklist (if applicable).
- Booking Log (for Personal Training or scheduled Classes).
- Notes in the member's account, as documented by the club.
- Email communication between the club and the member.
- Medical documentation, showing injury or disability.
- Copy of payment receipts and invoices.
- Physical copy of a credit issued via check.
- SMS history.
- Image of the merchandise.
- Cardholder's photo ID.
- Merchant statement (a formal declaration attesting that the cardholder has not attempted to cancel their membership, the services were accurately described at the time of purchase, or that the merchant did not agree to credit the cardholder).
- Screenshots/images of video footage (we cannot use evidence in video format).
NOTE: It is imperative all documentation is uploaded in the member's account in ClubReady AND BE IN PDF FORMAT. Failure to provide the necessary documents will forfeit dispute rights and the chargeback case will be rejected. In order for ClubReady to expedite your case, please make sure the documentation listed above is readily available in the members agreement page. The options column located on the left of the agreement page is a great resource to house any information regarding the account.
What should I do if the club made a mistake and the member should win the dispute?
If you find a billing mistake, and the chargeback is valid, cancel the invoice and notate the information in the notes section of the agreement. The chargeback analyst will review the members account and inform the bank of the cancelled invoice.
The ClubReady Chargeback department only handles the past due invoice associated with the payment. Unless cancelled, any late payment fee invoices and returned payment fee invoices will be collected either by the club directly or by our Past Due Collections department.
When will I know if ClubReady won the case?
Once a chargeback case has been sent back to the bank, we can expect a decision in 90 - 180 days. When ClubReady is notified that the case is won for the club, the money will be redeposited, both reflected in the members account as well as the remit.
However, if the case is lost, no money will be returned. Past Due Collections as well as Third Party Collections will continue, in attempt to recoup the funds.
Where can I find the status of a chargeback case?
Updates to any chargeback cases can be found in the Refunds & Returns Report, located in the Reports > Sales tab in ClubReady. This report is updated daily and is the preferred method to keeping track of your returned payments. Alternatively, you can locate status updates within the customer's profile notes. Learn more about the article with our article Status of a Chargeback Case.
How can I prevent a chargeback?
The only way to truly prevent chargeback is to accept cash only as a form of payment. Since it is almost impossible to run a business based solely on cash, we can minimize the risk of chargebacks with the following suggested best practices:
- Make sure the agreement is fully signed with a legible signature, and that the cardholder is named as the responsible party.
- Go over the key points in the agreement: Cancellation Policies, Billing Policies, and Goods and Services Usage Policies are all potential miscommunication aspects of the contract.
- Get all freeze and cancellation requests in writing, and follow all guidelines of the policies in the signed agreement.
- Refund any erroneous charges as soon as possible. Don't wait until the cardholder notices to take action.
- Notate in the club notes any verbal communication. Be as detailed and objective as possible.
- Upload any signed forms, emails and other documentation into the members account quickly.
- Be upfront and honest about gym policies and rules. Again, miscommunication is the biggest reason for chargebacks.
NOTE: This document is intended to be a general overview of the Chargeback Process within ClubReady. Each case is unique and sometimes requires more research in determining the outcome. Even with all necessary documentation provided, it is the bank's SOLE discretion on the outcome of the chargeback case, and ClubReady cannot guarantee success.
How does a chargeback affect a Member's account?
ClubReady receives daily reports from the processor for any charges that have been returned to the customers. Once those reports are uploaded, a debit is created in the members account (as a past due amount) and invoices for return payment as well as late fees are created to help the club recoup fees from the transaction.
What happens if a member calls their bank to stop the chargeback?
The updates will not reflect automatically - the bank will contact ClubReady to notify our Chargeback team of this update. The Chargeback team will be responsible in updating their profile. There is no exact timeline but the member can come into the studio and update the profile later accordingly.
Why is the client's payment profile deleted from the system?
The CC or ACH will be automatically deleted from the customer's account to 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 once the dispute is done.
Does a chargeback create a returned payment fee in the member's profile?
A returned payment fee is a charge incurred when a consumer bounces a payment. If a member (or, more specifically, the cardholder) disagrees with a charge made to their credit card, they have the right to file a dispute, or chargeback, with the bank. The fee needs to be requested to be deleted by an Owner/Club Master Admin. Once the owner approves the cancellation then ClubReady can waive the fee.
When should you expect the Member's account to be credited?
Once all documentation is presented to the merchant processor, it can take 45 - 60 days for the chargeback to be reversed. When we receive notice, the members account will be credited only for the amount disputed. Any late fees or return payment fees are the clubs responsibility to collect.
In addition, the member has the right to dispute the reversal decision and can request arbitration. The card issuer requires a $500 fee (per chargeback) to retain mediation lawyers who will review the dispute and make a final ruling on the case. The fee, along with the original amount of the chargeback, will be debited to the losing party. Most cases do not warrant arbitration and ClubReady accepts the charges with no further rights to dispute.
If you have any questions or concerns regarding a chargeback, you can contact our chargeback department via email at chargebackinquiries@clubready.com and someone will be happy to assist you.
How does Tap to Pay offer additional protections against POS fraud?
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