It is sale season! Everyone is on a shopping spree, with dozens of products in their online shopping cart. For instance, Ms. D is on a shoe fest and has ordered five pairs of shoes through an e-commerce site. She gets four pairs delivered and has been waiting on that fifth pair for quite some time. But it doesn’t show up, and as the next step, Ms. D contacts the merchant for getting back her money. Now, there are two outcomes to this conversation, first, the merchant agrees to refund the money, and second, where there is no response at all.
If it is the first option, all is well with Ms. D and the merchant, but if the second option has transpired, then Ms. D has no other recourse but to raise this issue with her bank and dispute the value of the 5th pair of shoes, which was a part of the entire transaction. And this partial amount dispute is known as “Partial Chargeback” in the payment dispute and chargeback ecosystem.
What is a Partial Chargeback?
A partial chargeback is a chargeback for a lesser amount than the total transaction amount. And it is treated the same way as a normal chargeback claim, even though the amount disputed is not the entire transaction amount.
The reason behind this is that the time and resources spent to handle this is the same as the usual chargeback cycle. So, there is no concession of fee and costs associated with partial chargeback. That’s not all, partial chargebacks can also go through the processes of pre-arbitration, arbitration up until good faith, if need be.
Why Do Partial Chargebacks Occur?
- When the ordered product was never delivered.
For instance, cardholder orders shoes from an e-commerce store. Three out of four shoes are delivered, but the fourth never shows up, and the merchant does not respond to the query. The cardholder contacts their bank to dispute the cost of the fourth shoe on the grounds that the product was never delivered.
- When the merchant overcharges and the cardholder disputes only the excess amount.
Consider that a cardholder purchases a toy from an exhibition and pays INR 5,000. But when he reviews his bank statement, he observes that the vendor charged him INR 6,000. He then disputes the INR 1,000 that was overcharged.
- When the cardholder disputes the amount that was unused.
For example, a cardholder who prepaid for lodging but was forced to leave early due to a sudden electric short circuit. In this situation, the cardholder can dispute the amount they paid for the unused lodging.
Partial Chargeback workflow:
Step 1: The cardholder contacts their issuer to file the dispute.
Step 2: The cardholder must apprise their issuer with the relevant proofs, like the transaction receipt, bill, and proof of conversation with the merchant requesting a refund to file the partial chargeback.
Step 3: Through the acquirer, the merchant will receive the partial chargeback claim for review. At this stage, the merchant can either accept the chargeback claim or dispute it.
i) If the merchant accepts the claim, he needs to pay the chargeback fee and refund the cardholder via their issuer, and the chargeback process ends there.
ii) If the merchant decides to dispute the claim, he can go for representment stating why this partial chargeback is invalid.
Step 4: After representment, the parties can contest the decision if not satisfied by proceeding to the further stages of the chargeback process.
In conclusion, a partial chargeback is raised when a customer has an issue with only a particular part of a large transaction. It is quite uncommon as most customers tend to dispute the whole transaction instead of a partial amount.