Occasionally, donors will make a mistake when entering a gift or forget about a recurring gift and decide they need the money back. There are two routes a donor can take to remedy this: initiating a chargeback with their bank, or asking you for a refund. Subsplash recommends that you make the refund option clear to your donors and staff, as refunds are always free for you and good for donor relations, and chargeback fees are costly and may eventually damage your ability to accept donations.
What is a dispute?
A dispute is initiated when the account holder (customer or donor) forces a refund through their card, line of credit, or bank account. dispute are usually initiated if the payment or donation is disputed or fraudulent. Often, this is done because conversations with the merchant or donee were not satisfactory, or without consulting the merchant or donee at all.
When this happens, the donor’s bank will investigate each dispute and assess a fee on top of the amount donated in order to cover their investigation. These fees can range from $15 to $100 or more. Additionally, each dispute results in a dispute mark, and donees with excessive dispute marks may be forced to establish a dispute reserve fund or even close their account. Disputes may be contested by the merchant, but the process takes a long time, is a headache to clear up, and is very rarely resolved in favor of the merchant: your church.
What is a refund?
A refund is exactly what it sounds like—refunding the donor’s money through donor/church cooperation. Because refunds are done willingly, no additional fees are assessed and no negative records are attached to the refunding account. Additionally, it’s less work to issue a refund through the Subsplash Giving Dashboard than it is for a donor to contact their bank to initiate a dispute. This keeps donors happy! In short, refunds are always free, both monetarily and in terms of additional work.
Subsplash recommends the following as best practices for issuing refunds:
If possible, have at least two people see and approve refund requests, not just individuals.
Issue refunds promptly to prevent the risk of donor-initiated dispute.
Communicate with the donor through each step of the process, both to keep him or her apprised of the situation and for good customer service.
Disputes vs. refunds
Both methods—dispute or refund—will end up with the donor getting their money back. However, the dispute will cost money and put a dispute mark on the account. Refunds are free and much easier.
If a donor requests a refund, the best practice is to process that refund for them through the Subsplash Giving Dashboard:
Select the specific donation from the Transactions tab.
In the top right will be a Refund button, where you can process the refund and send a note to the donor about the refund, as well as keep internal notes for your records.