There are several ways a payment can be reversed. However, they differ significantly in terms of which side initiates the reversal, what process follows, and what fees apply. In this article, you will get an overview of what the individual terms mean, how the right of withdrawal is regulated by law, and how the respective processes work.
Contents
- Terms and differences at a glance
- Statutory right of withdrawal and goodwill
- Refunds and cancellations
- Disputes
- Chargebacks
- How to handle disputes and chargebacks
Terms and differences at a glance
- A refund is a repayment that you initiate yourself via Tentary. You actively decide to reverse an order and refund the full amount to the buyer. This may be the case, for example, if you offer a (voluntary) right of withdrawal and your customers wish to exercise it. The cancellation is the technical process in Tentary through which you carry out this refund.
- With a partial refund, customers receive a partial amount back.
- A dispute is a formal buyer protection case with the payment provider. Buyers can report a problem with their payment through their payment service provider, for example that they did not receive their product or that the charge was not authorized.
- A chargeback occurs when buyers instruct their bank or payment provider to reverse a payment. A chargeback can therefore only be initiated by your customers. The bank or payment provider reviews the case and then decides whether the amount will be charged back to the buyer or not.
Statutory right of withdrawal and goodwill
In the EU, digital purchases are generally subject to a statutory right of withdrawal of 14 days. Within this period, buyers can generally withdraw from the purchase. This means that the money must be refunded and at the same time your customers lose access to your product.
However, for digital products, the right of withdrawal can be excluded, as the respective products can be fully used and reproduced from the moment of purchase. Such an exclusion must, however, be made explicitly and accepted by your customers.
At Tentary, an exclusion of the right of withdrawal is automatically displayed during the checkout process for digital products and must be accepted by buyers before payment.
Therefore, in this case you are not obligated to comply with a cancellation request.
Recommendation: While there are legal regulations regarding withdrawal periods that you must comply with, many sellers additionally offer a voluntary return policy as a goodwill gesture during the first days after a purchase. This can help build and maintain a good relationship with your community.
You can set the withdrawal period for each individual product in its settings. To do this, open your product, scroll all the way down, and check the option Adjust withdrawal period. You then have the option to choose a period of 14 days or 30 days.
Refunds and cancellations
A cancellation refers to the reversal of an entire sales transaction. This means that buyers are refunded the full amount via the payment method used at the time of purchase. At the same time, their access to the purchased product is automatically revoked. Your buyers are automatically notified of the refund by us via email. The order status in your sale details changes accordingly to Refunded.
Note: With a cancellation, your buyers are refunded the product price.
You can find out which fees apply to you in the section Cancellation fees.
Processing a cancellation
To cancel an order, go to the menu item Sales and click on the relevant sale you wish to refund. In the Actions section, you will find the Refund now button. As soon as you click on it, Tentary automatically initiates the full refund process and revokes the buyer's access to the product.
Please note: Cancellations are possible up to a maximum of 180 days after the purchase date. If this period has been exceeded, or there are other reasons that prevent a cancellation, the refund button will not be displayed.
Cancellation fees
The transaction fee from Tentary is not refunded upon cancellation, as is standard in the industry.
The payment processing fee from Stripe is also not refunded. With PayPal, you receive the variable fees for the original payment processing back, but not the fixed fee. With Mollie, a small additional fee of €0.25 is charged for a refund.
Disputes
A dispute is a reported case of conflict regarding a payment. In this case, buyers contact their payment provider — Stripe, PayPal, or Mollie — and state that they do not agree with the charge, for example because they did not authorize the payment or did not receive their product.
Of course, you will be informed about this via email and have the opportunity to respond to the dispute. Additionally, you can submit evidence that supports your position, such as proof of delivery of the order confirmation with access to the product.
The payment provider then decides based on the available information whether the dispute is resolved in favor of the buyers or in your favor as the seller.
A dispute can therefore result in a chargeback if the payment provider decides the case in favor of the buyers or if insufficient evidence is submitted. Information on further steps in this case can be found in the section How to handle disputes and chargebacks.
Chargebacks
A chargeback is the actual reversal of an already paid amount back to the buyers.
A chargeback can occur when a dispute is decided in favor of the buyers or when buyers directly initiate a reversal through their bank or card provider.
A direct chargeback, without a prior dispute with the option to appeal, is particularly possible with direct debit and credit card charges. Banks thoroughly review chargeback requests for credit cards, as there must be a valid reason for the reversal. Direct debits, on the other hand, can be reversed relatively easily, which is why they are disabled by default, among other reasons (learn more about direct debits).
If one of your sales is affected by a chargeback, Stripe, PayPal, or Mollie will contact you and inform you about it. You then have the opportunity to submit evidence and contest the case in the event of chargebacks from credit card payments. Chargebacks for direct debits cannot be contested or reversed.
If the payment provider decides in favor of the buyers after reviewing the evidence, the chargeback remains in place and you will be charged additional fees by your payment provider. Information on the further process is explained in the section How to handle disputes and chargebacks.
Fees for a successful chargeback
For chargebacks, the payment providers Stripe, PayPal, and Mollie charge the following fees. No additional costs are incurred from our platform.
Chargeback fee at Stripe: €20 (more at Stripe)
Chargeback fee at PayPal: €16 (more at PayPal)
Chargeback fee at Mollie: €10–25, depending on the payment method (more at Mollie)
Note: We do not provide legal advice. If you are unsure which regulations apply to you and your products, please seek professional legal assistance.
How to handle disputes and chargebacks
A payment provider's decision in a dispute or chargeback has no legal significance regarding the situation. If a valid purchase contract was formed and product access was sent via the order confirmation, you are still entitled to the payment. Payment providers make decisions based on their information and internal policies, not as part of a legal assessment.
If the payment provider decides the buyer protection case in favor of the customers, you have the option to hand over the claim to us for debt collection. You can find more information in the article Dunning and debt collection.
