Chargebacks

Learn what to expect when a customer files a chargeback.

What you need to know about chargebacks 

With Checkout, Zonos offers fraud coverage to mitigate risks from fraudulent chargebacks.

• Unauthorized chargebacks never hit your account.
• Zonos handles chargebacks directly, so you do not have to.
• Most chargebacks incur a 25 USD fee. The fee structure depends on the processor:
  • Zonos Payments uses Stripe, which takes the fee as soon as the chargeback is initiated. The fee applies to all chargebacks, won or lost.
  • PayPal goes through Zonos' PayPal account. We only take the fee if the chargeback is lost. If the chargeback is won, no fee is taken.

Coverage 

What is covered

With Checkout, you get to use Zonos' fraud coverage, which covers any unauthorized or fraudulent chargebacks that may occur. This means that even if the chargeback is lost, Zonos will pay the cost. Examples of this include:

• Unauthorized transactions
• Fraudulent chargebacks
• FX complaints

Zonos may reach out to you to request documents needed to fight the chargeback. Zonos' fraud coverage is void if you do not provide dispute documents by the requested deadline.

What is not covered

Zonos' fraud coverage does not cover chargebacks that have to do with the product itself. With Checkout, Zonos will still handle fighting the chargeback for you, even when the chargeback type is not covered. However, this means that if lost, you will be responsible for the amount that is refunded to the customer. Examples of when you are responsible for lost chargebacks include:

• Item not received
• Not as described
• Damaged/defective
• Lost in transit
  • Exception: iGlobal, our legacy product, does cover lost in transit
• ‘Friendly Fraud’

Chargeback process 

The chargeback process is slightly different depending on which payment method was used — Zonos Payments or PayPal. Either way, we generally submit evidence within a week. However, it can take up to four months for a decision to be made on chargebacks.

Zonos Payments

Chargebacks via Zonos Payments follow this process:

1. Dispute is entered: A customer disputes a charge on their bank account.
2. Charge is reversed: Stripe automatically pulls the funds when a chargeback is submitted. If the chargeback is won (in step 4), they will return the funds to you, the retailer.
3. Fight chargeback: Zonos will submit evidence and fight the chargeback for you. We may ask you for supporting documents during this time.
4. Decision is made: The bank will review the evidence and decide to either side with the customer (give the customer the funds they took in step 2) or side with you (return the funds to you).

PayPal

Chargebacks via PayPal follow this process:

1. Dispute is entered: A customer disputes a charge on their bank account.
2. Fight chargeback: Zonos will submit evidence and fight the chargeback for you. We may ask you for supporting documents during this time.
3. Decision is made: The bank will review the evidence and decide to either side with the customer (take the funds from you to refund the customer), or side with you, the retailer (leave the funds with you).
4. Optional appeal: If the customer used PayPal, we have 30 days to appeal the decision if it was not in our favor.

Inquiries vs chargebacks 

While all shoppers can file a chargeback (whether they paid via Zonos Payments or PayPal), PayPal allows another type of dispute called an inquiry. Inquiries are a precursor to chargebacks and are less severe than chargebacks. Below are the key differences between inquiries and chargebacks:

• Inquiries allow Zonos to message your end customer in PayPal to try to resolve the issue without incurring a chargeback. Inquiries that are resolved before turning into a chargeback do not have a dispute fee.
• Credit card networks monitor the number of chargebacks you recieve, but they do not monitor inquiries. This means that inquiries do not count against you (whereas chargebacks do).
• Inquiries are also allowed a longer time frame to reach a resolution.