Configuring Chargeback Management

This document contains the steps you need to perform for complete configuration of Chargeback Management in Chargebee. Learn more about Chargeback Management.

Prerequisites

• Chargebee requires webhooks to communicate with gateways. Therefore, it is mandatory to configure webhooks for your gateway.
• To listen to chargeback-related webhooks from Adyen, make sure you have enabled the CHARGEBACK, DISPUTE_DEFENSE_PERIOD_ENDED, and SECOND_CHARGEBACK events under Webhooks settings in your Adyen account. Learn more
• To test chargeback management with Stripe, connect your test site with Stripe's sandbox account. Chargeback scenarios cannot be simulated by adding cards to Chargebee's test gateway.

Configuring Chargeback Management in Chargebee

You must first enable Chargeback Management to use this feature.

To enable Chargeback Management, follow these steps:

1. Click Settings > Configure Chargebee > Billing LogIQ > Chargeback Management.
2. Select Enable.

The Chargeback Management page allows you to configure settings for handling subscriptions, invoices, and credit notes during a chargeback.

Choose how to handle invoices

The instructions you set here affect the invoice module.

When a chargeback is initiated: Specify what action Chargebee should perform when the chargeback is initiated.

Available options:

• Create credit note and record refund (Recommended): When the payment gateway notifies Chargebee that the chargeback is initiated, a refundable credit note is created with "Refunded" status. The refund is automatically recorded as the funds are already debited from the merchant's account.
  • This option is recommended for merchants who do not wish to dispute the chargeback. Selecting this option automates the entire flow and simplifies accounting.

• Mark invoice as Not Paid and record refund: The status of the invoice is changed from Paid to Not Paid and a refund is recorded. This option is suitable for merchants who wish to review every chargeback.

• Do nothing: No changes are applied to the invoice.

When the chargeback is lost: Configure what needs to be done when a chargeback is lost.

If you have chosen Create credit note and record refund (Recommended) or Mark invoice as Not Paid and record refund in the previous setting, then no further action is required. If you selected "Do nothing," you can choose to Create a credit note and record refund or Mark invoice as Not Paid and record refund.

Choose how to handle affected subscriptions

The instructions you set here affect the subscription module.

When a chargeback is initiated: Choose how to handle the subscription for the transaction with the chargeback.

Available options:

• Cancel immediately: Cancels the subscription as soon as the webhook is received.
• Cancel at end of term: Cancels the subscription at the end of the billing term.
• Pause forever immediately: Pauses the subscription immediately. To resume, you must do so manually.
• Pause forever at end of term: Pauses the subscription at the end of the term. To resume, you must do so manually.
• Do nothing: No action is taken.

When a chargeback is lost: Choose how to handle the subscription when the chargeback is lost. The configuration depends on your previous selection.

• If you selected Cancel immediately previously, you can choose Do nothing when the chargeback is lost.
• If you selected Cancel at end of term previously, you can choose Cancel immediately or Do nothing.
• If you selected Pause forever immediately previously, you can choose Cancel at end of term, Cancel immediately, or Do nothing.
• If you selected Pause forever at end of term previously, you can choose Pause forever immediately, Cancel at end of term, Cancel immediately, or Do nothing.
• If you selected Do nothing previously, you can choose Pause forever at end of term, Pause forever immediately, Cancel at end of term, Cancel immediately, or Do nothing.

Configure what happens to other subscriptions associated with the customer

You can choose what happens to other subscriptions associated with the customer who initiated a chargeback. If you do not want to take action on other subscriptions, you can leave this setting disabled.

When a chargeback is initiated: Choose how to handle other subscriptions associated with the customer once they initiate a chargeback for a transaction.

Available options:

• Cancel immediately: Cancels the subscription as soon as the webhook is received.
• Cancel at end of term: Cancels the subscription at the end of the billing term.
• Pause forever immediately: Pauses the subscription immediately. To resume, you must do so manually.
• Pause forever at end of term: Pauses the subscription at the end of the term. To resume, you must do so manually.
• Do nothing: No action is taken.

When a chargeback is lost: Choose how to handle other subscriptions associated with the customer when the chargeback is lost. The configuration depends on your previous selection.

• If you selected Cancel immediately previously, you can choose Do nothing.
• If you selected Cancel at end of term previously, you can choose Cancel immediately or Do nothing.
• If you selected Pause forever immediately previously, you can choose Cancel at end of term, Cancel immediately, or Do nothing.
• If you selected Pause forever at end of term previously, you can choose Pause forever immediately, Cancel at end of term, Cancel immediately, or Do nothing.
• If you selected Do nothing previously, you can choose Pause forever at end of term, Pause forever immediately, Cancel at end of term, Cancel immediately, or Do nothing.

Do not collect payments for unpaid invoices or unbilled charges from all subscriptions

If you enable this setting, Chargebee will stop collecting payments for unpaid invoices and unbilled charges for all subscriptions associated with a customer who has raised a chargeback. This overrides the site settings selected for subscription cancellation and pause subscription.