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. Disputes (often called Chargebacks) are initiated by a payer–the parent/guardian on Playground who's payment method was charged.
Playground is not the payment processor for these transactions so we do not have authority over who wins or loses a dispute. We try our best to inform the merchant (you!) of the status of disputes and ensure that you understand the impact that the dispute may have on your center's finances, and what steps are available to you in the event that this does happen to you.
ACH Disputes
ACH payments are processed by the Automated Clearing House and have very 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, who 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, or take legal action against the payer to recover the funds should the dispute be ruled in favor of the payer.
Credit Card Disputes
During the process of a credit card dispute, Playground has a lot more to offer than during an ACH dispute. 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 outline the process required for this dispute in that email. The billing administrator will be notified they have a certain amount of days to submit evidence to refute the dispute, which consists of:
Any details you may have regarding the circumstances or details of the disputed charge
Any contracts or signatures, as well as any supplementary documents or information that may be relevant or pertaining to this dispute.
Depending on the reason for dispute, it may be helpful to leverage Playground's reporting features to provide proof of services rendered or something of that nature.
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, we send it to our payment processor on your behalf, who then submits the evidence to the credit card company. After this occurs, Playground is not told anything about the investigation, but will notify you immediately when the credit card company has reached a decision and what that outcome was.
Should a dispute be won by the payer, the funds will be returned to the payer. Should the center win 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.