Sometimes a family's payment does not go as expected, resulting in a disputed or failed payment. Being aware of these occurrences and following up in a timely manner is vital to ensure that your program is paid for services rendered and that families are aware of what is happening on their student’s billing accounts.
Disputed Charges
Every business dealing with payments will likely deal with a disagreement over a payment at some point. With online payments via credit card and ACH, these processes are well-defined and controlled by the issuing banks.
Payment disputes (often called chargebacks) are initiated by a payer—in this case, the payer is the guardian on Playground, whose payment method was charged. The payer can file the dispute with their credit card company or financial institution anytime, anywhere, and for any transaction type. Once filed, the payer's credit card company or financial institution will begin an investigation to determine if the payer wins (receives their money back) or loses (does not receive their money back) the dispute.
Playground has no control over who wins or loses a dispute. However, Playground wants to ensure that you know what happens when a dispute is filed, understand the impact the dispute may have on your program's finances, and what steps you can take if this uncommon event does happen.
ACH Disputes
ACH payments are processed by the Automated Clearing House and have strict rules regarding disputes. These payments are direct bank-to-bank transfers that can be disputed for one of three reasons:
Wrong amount
Wrong date
Transaction never authorized
These disputes are challenging for centers because ACH disputes are investigated entirely by the issuing bank, and no evidence is allowed to be submitted by your center. The governing body for ACH payment processing is NACHA, which has very strict rules and procedures that heavily favor the payer.
🚨 Because of these regulations, there is nothing Playground can do in the event of an ACH dispute except inform you that a dispute has been made and the ultimate outcome of this dispute.
In the event of an ACH dispute, providers can choose to either:
Reach out to the payer to discuss possible next steps.
Take legal action against the payer to recover the funds should the dispute be ruled in favor of the payer.
It's best practice to require a family deposit as a form of insurance or protection so you're prepared if a situation like this does affect you. In the mentioned scenario, the deposit could help cover any losses.
Playground is here to support you during a dispute, but if the payer chooses to pursue this option, Playground does not have control over the process or outcome.
Credit Card Disputes
During the process of a credit card dispute, Playground has a lot more to offer. The process for a dispute is shown in the graphic below (from our payment processor)
As soon as Playground is notified of a credit card dispute, we will send you an email informing you of the dispute and outlining the process required. The billing administrator will be notified that they have a certain number of days to submit evidence to refute the dispute. The evidence consists of:
Any details you may have regarding the circumstances or details of the disputed charge
Any contracts, signatures, supplementary documents, or information that may be relevant or pertaining to this dispute.
A copy of the family's signature from the handbook or tuition agreement and any available information outlining tuition amounts and additional charges.
Depending on the reason for dispute, it may be helpful to leverage Playground's attendance or activity reporting features to provide proof of services rendered.
Written communication with the payer regarding the days in question or disputed charge. This can be any form of written communication.
Once this evidence is submitted, it's sent to our payment processor on your behalf, who then submits it to the credit card company. After this occurs, Playground is not told anything about the investigation but will notify you of the outcome when the credit card company has reached a decision.
If the payer wins a dispute, the funds will be returned to the payer. If the center wins the dispute, the funds will be retained by the center.
🚨 Before refunding a contentious payment, ensure no dispute is filed as disputes and refunds can be initiated separately, which could end up double-refunding the customer should they win the dispute.
Impacts to Payout Deposits & Student Balances
If a credit card company rules in favor of a family, that institution could withdraw the money from the service provider. Credit card companies can pull back funds, which will be pulled from future deposits to the deposit account. This may result in a negative deposit.
The payment amount initially credited to the child's account will be removed, and their balance will increase by the disputed payment amount.
Failed Payments
If a payment made against a balance fails, Playground will immediately alert any administrators set to receive failed payment notifications. Playground will also notify the payer via email. If the payer's financial institution has shared a reason for failure, that reason will be included in the email. Failure reasons are provided by the payer's financial institution, not Playground. If there is no stated reason or if the payer disagrees with the reason, the payer should reach out to their financial institution for more information.
💡 After two failed ACH payments, Playground will automatically turn off autopay for that payer. That payer will need to re-enable autopay once their payment is able to go through.
View failed payments
To view failed payments, navigate to the Billing tab and click on Transactions.
Click Credits to see a record of all payments made.
Failed payments are also visible under the student's billing account, under their Credits tab on their Payments profile.
From the Credits list, you can view any failed payments on the Status column which will show the payment's status.
Click on the ellipsis next to the student and click View for Transaction details about the failed payment.
Resolve Failed Payments
To resolve a failed payment, we recommend contacting the payer to directly request they resubmit the payment. The payer can follow the steps here to make a payment.
Once they're ready, the payer can submit a new payment against the balance due. If they provide the payment via cash, check, or a third-party system such as Venmo and CashApp, you can log this as an offline payment and apply it to open invoices.
Alternatively, you can charge other saved payments methods that guardians have connected to their account, or you can add a guardian's card manually to charge a different payment method.
🚨 If the failed payment was made via Autopay, it will not be automatically attempted again until the next invoice on the account becomes due. The payer must log a payment manually through their Playground account to have payment initiated before the next invoice due date.