Split Payment Chargebacks and Returns
Learn how Payabli handles chargebacks and ACH returns for split transactions
In a split funded transaction, a part of the original transaction amount funds to one bank accounts and part funds to another account.
General flow
Here’s how Payabli handles ACH returns and chargebacks for split transactions.
- Payabli receives an ACH return or chargeback for a payment to the merchant who originated the transaction.
- Because of how transaction authorizations work, when there is a return or chargeback, Payabli removes the entire amount from the origination merchant’s Payabli ledger. Payabli then reverses the original split instructions and transfers any split funds that were sent to the other accounts from those accounts back to the origination merchant.
Because fees are non-refundable, they’re not returned to merchants in the event of a return or chargeback. See Pass-through Fees for more information.
Examples
The following examples show how funds move between accounts when a chargeback or return is applied to a split transaction.
Original Transaction: A school receives tuition payment of $10000, with $8000 going to its main account and $2000 to a partner account.
ACH Return: The student’s payment is returned for fraud.
Payabli’s Action: Payabli reverses the total $10000 from the school’s Payabli ledger. Payabli then transfers $2000 from the partner ledger to the school’s account. Finally, Payabli removes $8000 from the school’s account and $2000 from the partner’s account to reconcile their Payabli ledgers.
Original Transaction: A school receives tuition payment of $10000, with $8000 going to its main account and $2000 to a partner account.
ACH Return: The student’s payment is returned for fraud.
Payabli’s Action: Payabli reverses the total $10000 from the school’s Payabli ledger. Payabli then transfers $2000 from the partner ledger to the school’s account. Finally, Payabli removes $8000 from the school’s account and $2000 from the partner’s account to reconcile their Payabli ledgers.
Original Transaction: An HOA collects annual dues of $1500 from a homeowner, splitting the payment with $1000 going to the HOA’s account and $500 to a fund for landscaping maintenance.
Chargeback: The homeowner disputes the charge, claiming services weren’t rendered as agreed, and initiates a chargeback.
Payabli’s Action: Payabli debits the entire $1500 from the HOA’s Payabli ledger. Payabli then recovers the $500 initially sent to the landscaping fund’s Payabli ledger and sends it to the HOA’s account. Finally, Payabli removes $1000 from the HOA’s account, and $500 from the landscaping fund’s account to reconcile their Payabli ledgers.
Original Transaction: A flooring contractor receives a payment of $5000 for a large project, dividing the payment with $3500 to their business account and $1500 to an account used for materials purchasing.
Chargeback: The client is unsatisfied with the installation and files a chargeback.
Payabli’s Action: Payabli removes $5000 from the contractor’s Payabli ledger. Payabli also reclaims the $1500 from the materials fund Payabli ledger and adds it back to the contractor’s account. Finally, Payabli removes $1500 fom the material fund’s bank account, and $3500 from the contractor’s bank account to reconcile their Payabli ledgers.
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