A chargeback occurs when a customer disputes a charge with their credit card or direct debit issuer, leading to the reversal of the payment. Common reasons include fraud, merchandise not received, insufficient account balance, incorrect bank account numbers, or dissatisfaction with the product or service quality.

Communication and Steps for Handling Chargebacks

When a chargeback occurs, Zomentum will promptly inform you of the transaction failure. Here’s how Zomentum handles chargebacks in Xero:

  1. Delete Payment: Customers need to manually delete the payment in Xero to reopen the invoice, as there is currently no automatic process for handling this in Xero.

You should discuss any bookkeeping with your accountant and take their advice where appropriate. Zomentum can neither support nor comment on bookkeeping practices.

For ACH and BACS Direct Debit Payments

If the payment method was ACH or BACS Direct Debit, and the reason code matches specific criteria, the saved payment method against which the chargeback occurred is removed:

  • ACH Reason Codes:
    • R02 (Account closed)
    • R03 (No Account/Unable to Locate Account)
    • R04 (Invalid account number)
    • R12 (Branch sold to another DFI)
    • R13 (Invalid ACH routing number)
    • R15 (Beneficiary or account holder deceased)
    • R20 (Non-transaction account)
  • BACS Direct Debit Reason Codes:
    • 3 (Instruction transferred to another bank/building society)
    • 5 (No account)
    • 6 (No Direct Debit Instruction)
    • B (Account closed)
    • C (Account/Instruction transferred to a different branch)
    • F (Invalid account type)
    • L (Incorrect payer's account details)
    • O (Invalid Reference).

If the payment method was ACH, and the reason code is R29 (Corporate customer advises not authorized), then the saved payment method will not be removed but you must ensure your business customers instruct their bank to add Adyen's ACH Company ID 8263863381 to the list of entities that are allowed to debit or credit their business account.

Partner Communication

Partners receive a detailed email explaining the reason for the chargeback and necessary actions. It is advised to inform end clients to update their payment methods accordingly.