Under the Direct Debit Guarantee, customers are able to chargeback a payment that is taken in error, or without their authorisation. If you’re building your own integration, this guide will help to explain how to handle the events we send relating to chargebacks.
In the vast majority of cases, a chargeback will occur after a payment has been confirmed and paid out to the merchant.
In this case, you will receive a charged_back event when we receive notification of the chargeback from the customer’s bank. This is followed by a chargeback_settled event, which occurs when the next payout that can cover the charged back amount is created. e.g.
It’s also possible (but highly unlikely) that a chargeback can be cancelled. If this occurs, you’ll receive a chargeback_cancelled event, with the amount being credited back to the merchant in the next payout (presuming that the amount has already been debited from the merchant in a chargeback_settled event).