How to handle Bank of America chargebacks in 2020
If you’re dealing with chargebacks on an ongoing, long-term basis, you may come to develop some opinions about the banks that get involved. Your primary relationship will be with your acquiring bank, the institution that provides you with your merchant account, but it’s likely you’ll find yourself at odds with some of the larger issuing banks on multiple occasions. With millions of customers across the United States, it’s likely that Bank of America will often be the issuers you’re having to contend with.
An institution the size of Bank of America can be an intimidating opponent, but ultimately, you’re both subject to the rules imposed by Visa and Mastercard, and even big banks have a vested interest in following the rules and doing the right (and legal) thing.
Are you learning how to use the Bank of America's platform to dispute chargebacks? Here's our Step by Step Walkthrough.
Have you got a Bank of America chargeback awaiting your response but you aren't sure how? Here’s what you need to know about dealing with this massive national bank.
What is Bank of America's chargeback fee?
Like any financial institution, Bank of America will start assessing fees as soon as it gets involved in a chargeback. As an acquiring bank, Bank of America would require its merchants to pay a chargeback fee once the process is initiated. Typically, the chargeback fee at this point in the process ranges from 15% to 40% of the chargeback amount.
When a chargeback has gone through the representment phase and the losing party does not accept the decision, the chargeback may enter the arbitration phase where the card network reviews all evidence and renders a final decision. The arbitration fees due from the losing party can run as high as $500, but these fees are paid to the card networks, not the acquiring or issuing banks.
Bank of America Chargeback Policy
Bank of America instructs its customers to contact the merchant they are having issues with, to attempt to resolve them amicably, before disputing the transaction and requesting a chargeback.
If the customer cannot resolve the issue, they are given 60 days from the closing date of the statement the charge appears on to contact Bank of America to make a formal dispute.
Bank of America reserves the right to dispute older charges, but they do not guarantee their customers immediate temporary chargeback funds for disputed transactions that exceed this time limit.
Bank of America Chargeback Time Limit
Bank of America gives its customers 60 days to dispute a transaction and request a chargeback. Once Bank of America has accepted the chargeback request and put it through their system, the chargeback time limits mandated by the relevant card networks take effect.
For merchants, some key time limits to remember are the 18-day window to respond to Visa cardholder disputes (required whether you intend to fight the chargeback or not), 30 days to submit a chargeback representment case after the chargeback has been acknowledged, 30 days to initiate a pre-arbitration chargeback after representment has concluded, and 10 days to pursue arbitration after the pre-arbitration process has concluded.
Bank of America Chargeback Process
As the issuing bank in a chargeback dispute, Bank of America will pass along the initial complaint to the acquiring bank. A retrieval request will be sent to ascertain the basic validity of the chargeback, and if it is allowed to proceed, it will be sent back to Bank of America for their decision. Bank of America says that they may take up to two billing cycles, not to exceed 90 days, to reach their decision.
Transactions in the chargeback process will not be considered delinquent by Bank of America while the chargeback is underway.
However, the amount may be counted toward the customer’s credit limit.
Conclusion: Why it Pays to Dispute Chargebacks
The most important thing to know about fighting chargebacks is that you’re not just fighting for the mere dollar amount of the disputed charge. You’re fighting for a healthy chargeback ratio, for your company’s good reputation, and for all of the add-on fees and charges that make each chargeback end up costing as much as twice the original transaction amount. Your best weapons against any chargeback are compelling evidence that shows you acted according to the rules, and a statement that concisely explains your reasons for challenging the chargeback.
Ultimately, chargebacks aren’t just about specific customer situations and individual disputes. They’re about your overall business practices, and whether or not they’re inadvertently creating friction, confusion, and conflicts that lead customers to file chargebacks against you.
Many chargebacks come about because of bad return and exchange policies, misleading advertising and marketing efforts, product quality issues, sub-par customer service, and other aspects of your business that can be identified and corrected. When you engage in chargeback analysis and study the root causes of your chargebacks, you can see in stark detail what you’re doing wrong and how you can do better.