Chargeback policies

What is chargeback?

Chargeback, or "payment reversal" in English, occurs when a customer makes a purchase of your product and then contacts the card issuer to dispute that payment. To make this dispute, the customer can claim one of the following reasons:

Fraud: When a consumer identifies an unauthorized transaction on their account, they can request a chargeback to recover the funds.

Failure to deliver product or service: If the consumer has purchased a product or service that has not been delivered as promised, they can request a chargeback.

Defective product: If the consumer receives a damaged product, with defects, or not as advertised, they can request a chargeback.

Duplicate charge: If there is a duplication in the charge of the same transaction in an account, it is possible to request a chargeback.

Dissatisfaction with the product or service: In some situations, a consumer may claim a chargeback due to simple dissatisfaction with the product or service, although this is less common.

In the world of online shopping, one of the main challenges that can affect the health of your Octuspay account is undoubtedly chargeback. Therefore, to mitigate this problem, it is necessary to offer a quality product, have clear communication about what will be delivered, and provide effective support.

What are the penalties for high chargeback rates?

We cannot allow a high rate of chargebacks from producers. We understand that eventually, you may face chargebacks on your sales. Therefore, we are committed to maintaining open communication with producers. If our team identifies a high rate of chargebacks in your account, we will contact you to understand the reasons and seek solutions.

Currently, the healthy rate for your account is that chargebacks are below 1%. If there is a chargeback rate higher than what we consider healthy, the following penalties will be applied:

Balance withheld

We have implemented a Balance Withheld policy based on the chargeback rate associated with the account. This strategy gives the producer the chance to reduce their chargeback rate, replacing the need to apply total blocks on the account balance.

It is important to note that these penalties do not mean that you are within the acceptable chargeback rate (which is below 1%). Penalties are a measure to give the producer the opportunity to reduce the rate without having to stop the operation. In other words, we may take other necessary measures if our team identifies any risk to Octuspay.

Currently, we have 3 levels of penalties:

Chargeback rate ----> Penalty

greater than or equal to 1% and less than 1.5% -----> 10% of the balance withheld for 30 days

greater than or equal to 1.5% and less than 2% -----> 20% of the balance withheld for 45 days

greater than or equal to 2% -----> 30% of the balance withheld for 60 days

The period analyzed to calculate the rate is the last 60 days.

The trigger to calculate the rate is whenever a new chargeback occurs. That is, if you have managed to reduce the chargeback rate of your account, you will need to wait for a new chargeback to occur for the system to recalculate your rate and remove/apply penalties. This was a way we found to be more flexible considering the safety period for chargeback receipts and it is not negotiable.

Chargeback costs

When a chargeback occurs, Octuspay also incurs a fine from the acquirer, which is passed on to the producer.

Currently, fines vary according to your accumulated revenue (in USD or R$). Check the table for details:

INTERNATIONAL SALES (USD)
Accumulated Revenue in USD.	Prerequisites* *(if at least one criterion is not met, the producer falls into the previous category).	Chargeback Fine
Up to 20k USD	-	$10
Above 20k USD and less than 200k	➡️Prove revenue	$5
Above 200k USD	➡️Invoice within Octuspay ➡️3 months of registration ➡️Maximum chargeback 1.2% ➡️Previous Month Revenue: 60K USD	$0

DOMESTIC SALES (BRL)
Accumulated Revenue in BLR (R$)	Prerequisites* *(if at least one criterion is not met, the producer falls into the previous category)	Chargeback Fine
Up to 100K BRL	-	$10
Above 100K BRL and less than 1M	➡️Prove revenue	$5
Above 1M USD	➡️Invoice within Octuspay ➡️3 months of registration ➡️Maximum chargeback 1.2% ➡️Previous Month Revenue: 300K BRL	$0