Dealing with Chargebacks: A Dealer’s Guide

Chargeback Information for Dealers

⚠️ Note: This guide is for dealers not on myKaarma processing.

If your dealership uses myKaarma processing, please refer to the email notification you should have received from our Payments Support team and reply directly to that message.

What is a Chargeback?

A chargeback is a dispute filed by a customer through their bank or card issuer. If this happens, you’ll receive a notice with a final response date, the deadline by which you must respond to contest the chargeback.

Example Notice:

How to Dispute a Chargeback Through myKaarma Support

Follow these steps to respond:

1. Check the final response date listed on the notice.
2. Submit a support ticket or email support@mykaarma.com no later than 3 business days prior to the final response date.
   
3. In the ticket or email, please include: 
   • Customer name
   • Customer number 
   • RO number 
   • Date of Transaction 
     
4. myKaarma support will gather all of the relevant data for the transaction and send it via spreadsheet along with a dispute letter template that you will be able to fill out to send to either the MSP or bank. 
   
5. Submit the above documents along with a signed estimate, invoice, and/or receipt to the bank before the dispute deadline.

How to Manually Compile Documents to Dispute a Chargeback

Follow these steps to respond:

1. Download a copy of our chargeback form here.
   • Fill in all of the cells with the required information, and attach a screenshot of the transaction details within the second tab.
   • To download a copy of the customer's message thread, navigate to their profile in the Customer tab, click the printer icon, and then select Print All.
   • To copy a link to a specific call recording, click the Copy URL button on the left side of the call playback area.
   • The invoices and receipts you include should be the signed copies you've retained, however if you do not have any signed copies, you can find both by going to Payments > Order Status, and search for the RO number.
2. Download a copy of our chargeback letter template here.
   • Fill in all of the highlighted information, and remove any sections that are not applicable.
3. Submit the above documents along with a signed estimate, invoice, and/or receipt to the bank before the dispute deadline.

Best Practices to Prevent Chargebacks

To protect your dealership moving forward, we recommend:

• Eliminating Manual Card Entry: Manually entered cards stand the lowest chance of defeating a chargeback. Many dealer groups have turned this feature off entirely, with very limited exceptions (e.g., select managers entering warranty card information).

• Upgrading to EMV/CHIP Readers: PCI (Payment Card Industry) compliance standards disallow challenges to magstripe chargebacks. This means any CHIP card that is swiped instead of inserted is extremely vulnerable. We recommend phasing out magstripe payments and upgrading to CHIP readers, which we can provide as part of the myKaarma payments product. You can submit a request to learn more about this product here.

• Signing on with 3D Secure: While no solution can guarantee protection from fraud, 3D Secure (available through our partnership with a trusted third party) adds another layer of protection. If you’re interested, please submit a request here.

Additional Resources

For more details on fraud prevention, see: Payments: Card Fraud Prevention Tips