Understanding merchant chargebacks

A merchant chargeback is a disputed payment between a cardholder and merchant. It is requested by a customer and then issued by the cardholder's financial institution for a disputed transaction.

It is important to note that Macquarie only acts as an intermediary. The card schemes will decide whether the disputed transaction is refunded.

Why do chargebacks occur?

A chargeback can occur for several reasons, mainly if a cardholder notices a transaction which they haven’t authorised or don’t recognise.

Under the rules prescribed by the card schemes, you may be charged back for the value of a transaction if it’s deemed to be an invalid or unacceptable. In most cases, the value of the disputed transaction will be automatically debited from your nominated account.

A chargeback will also occur if you don’t respond to a retrieval request, the request is left unanswered or the supporting documentation you’ve supplied isn’t sufficient/not accepted by the cardholder’s bank.

Scenarios where chargebacks can occur:

  • unauthorised transactions and unauthorised use of card
  • incorrect transaction amount
  • processing error
  • transactions performed on a lost or stolen card
  • failing to respond to a retrieval request.

What are chargeback retrieval requests?

A chargeback retrieval request is sent to you when a cardholder disputes a transaction that’s been processed by you.

In response to this, we’ll request supporting documentation on the transaction for which the chargeback was raised against to prove that it was valid.

Minimising the risk of chargebacks in card not present transactions

We recommend you follow the security checks provided below in order to minimise the risk of chargebacks in connection with card not present transactions:

  • check the validity dates of the credit card are current
  • obtain an authorisation for all transactions
  • check the telephone directory to verify the client’s name, address, and telephone number
  • telephone the client to confirm the order.

Authorised transactions

Please note, that authorisation of a transaction doesn’t represent or warrant that a transaction is genuine. It also doesn’t mean a transaction isn’t subject to a chargeback.

Authorisation only verifies that the relevant card account is open and there are sufficient funds available in the account to meet the transaction amount. It also doesn’t guarantee that the person using the card is the authorised cardholder.

It’s important to remember that card not present transactions carry an inherently higher chargeback risk. If these transactions are disputed by a cardholder or if you’re unable to satisfactorily confirm the transaction, then the liability will remain with you.

What do I do if I receive a chargeback?

If you receive a chargeback notice, you need to provide evidence that supports the legitimacy of the disputed payment and that it was authorised by the cardholder.

This includes:

  • signed sales receipt
  • sales record, invoice or order form
  • signed delivery receipt
  • other applicable supporting documentation.

We also recommend contacting your client (i.e. the cardholder) directly to find out more information.

If the dispute isn’t resolved and the cardholder doesn’t withdraw the dispute or you’re unable to send us supporting documentation, your account may be debited for the disputed amount.

What do I do if I receive a retrieval request?

If you receive a retrieval request, you need to reply within the timeframe specified on the request email and with all relevant supporting documentation as required by the retrieval request. Please note that we are bound by relevant card scheme rules and are unable to alter the chargeback timelines so it’s important that you address chargeback notices quickly. 

You should email all relevant supporting documentation in relation to the transaction, including the following records to business@macquarie.com.

Supporting documentation may include:

  • signed sales receipt
  • method of shipment (if applicable)
  • sales record, invoice, or order form
  • signed delivery receipt and any other written confirmation of delivery
  • brief letter stating what occurred with the transaction
  • any other documents or records relevant to the transaction.

If you require assistance for merchant services, please contact the Merchant Support Team on 1800 183 879.

If you require assistance for DEFT, please contact the DEFT Support Team on 1800 620 673.

Additional information

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 within the time frames specified. If it's determined that the evidence provided is insufficient, it may result in a chargeback.

Merchants can also contact their customer to resolve the dispute. Macquarie doesn’t determine the scheme rules and regulations regarding Visa, Mastercard, American Express or eftpos. All banks/ financial institutions are governed by scheme rules and regulations.

Important Note: While evidence provided to the Macquarie Bank Fraud team will be used to validate the case, there is no guarantee or full protection against the chargeback. Please ensure you abide by guidelines provided by the bank and industry best practices to minimise fraud and chargebacks. Please refer to the Macquarie Merchant Services Terms and Conditions.