A chargeback occurs when a customer disputes a payment with their bank or card issuer. This can happen for reasons such as suspected fraud, a product not arriving, or dissatisfaction with the order. The bank reverses the payment while the case is investigated.

Chargebacks are initiated by the customer’s bank, not by Kapsule. We manage the process on your behalf, but vendors may be affected.

How Chargebacks Work

• The customer contacts their bank to dispute a charge

• The payment provider places the funds on hold

• A $25 dispute handling fee is applied (passed on directly from our payment provider)

• Kapsule gathers evidence to contest the dispute where possible

• The bank decides whether to return funds to the customer or release them back to the vendor

Why Chargebacks Happen

• The customer does not recognise the charge on their statement

• The product never arrived or was significantly delayed

• The item arrived damaged or not as described

• The customer claims fraud (unauthorised card use)

If the chargeback is resolved in your favour, the $25 fee is refunded.

Vendor Responsibilities

• Provide accurate product descriptions, clear images, and correct shipping information

• Dispatch orders promptly using tracked shipping

• Keep proof of fulfilment (tracking numbers, courier receipts)

• Maintain high standards of packaging to prevent damage

• Respond quickly if Kapsule requests supporting documentation

If you cannot provide evidence when requested, the dispute is more likely to be resolved in the customer’s favour.

How Kapsule Handles Chargebacks

• Kapsule manages all communication with the customer and their bank

• Kapsule collects and submits evidence on behalf of vendors

• Vendors are not expected to deal with the customer directly

• If the chargeback is lost, the order amount and the $25 fee are deducted from the next payout

“Chargebacks can’t always be avoided, but providing clear records and strong evidence gives us the best chance to win the dispute.”

FAQs

1. How much is the chargeback fee?
The fee is $25 per dispute, applied by our payment provider. It is reunded if the dispute is won.

2. Do vendors deal with customers directly during disputes?
No. Kapsule manages the process entirely. Vendors only need to provide evidence if requested.

3. What evidence is most useful for disputes?
Tracking numbers, courier confirmation of delivery, product descriptions, and customer communication records.

4. Can a customer still request a refund through Kapsule after a chargeback?
No. Once a chargeback is filed, the case must be resolved by the customer’s bank.

5. How can I reduce chargebacks?
Use tracked and insured shipping, describe products accurately, maintain high-quality packaging, and ensure orders are dispatched on time.

Related

• Returns & Refunds Process

• Handling Delivery Complaints

• Payout Schedules & Timelines

• Vendor Dashboard Overview