A chargeback occurs when a client disputes a credit card transaction with their issuing bank, and the funds are pulled back from your firm's bank account. Chargebacks may be issued for the full amount of the original payment (a full chargeback) or for a portion of it (a partial chargeback).
Before you start: This article focuses on what to do after a chargeback has finished processing — i.e., once the funds have been pulled from your firm's bank account and you need to reconcile that activity inside PracticePanther. For information on what a chargeback is, what to expect when you receive a chargeback notice, how the PantherPayments Compliance team works the dispute on your behalf, and tips for preventing chargebacks in the first place, please see What is a credit card chargeback? Use that article for pre-chargeback expectations and processing, and this article for recording and reconciling the chargeback in PracticePanther after it has finished processing.
PracticePanther does not currently offer a dedicated feature for processing chargebacks automatically. When your firm receives a chargeback notification from your payment processor, you will need to record the offsetting transaction in PracticePanther manually so that your contact balances, trust ledgers, invoices, and reports remain accurate.
There are two recommended ways to handle a chargeback in PracticePanther, depending on how the chargeback was funded by your processor:
Note: Always confirm the chargeback amount and which client/matter the original payment was applied to before recording the offsetting transaction. Reconciling against the chargeback notification from your processor will help avoid duplicate entries.
Option 1: Refund the original online payment electronically
If the original payment was processed online (for example, through PantherPayments) and is still available to refund, the cleanest way to record the chargeback is to issue a refund against that original payment. This keeps the original transaction tied to its refund and ensures the contact's payment history reflects the reversal.
Open the contact or matter the original online payment was applied to.
Navigate to the Payments tab and locate the original online payment that was charged back.
Open the payment and choose to refund it electronically.
Select the appropriate refund amount:
Full chargeback: Issue a full refund for the entire original payment amount.
Partial chargeback: Issue a partial refund matching the disputed amount only.
Add a note on the refund referencing the chargeback (for example, the case/dispute ID from your processor) so the entry can be traced back to the chargeback later.
Save the refund.
When to use this option: The original payment is an online payment in PracticePanther and you want the chargeback to be recorded as a refund against that exact transaction.
Option 2: Record a withdrawal payment and print a check
If you cannot (or do not want to) refund the original online payment electronically — for example, the original payment is too old to refund through your processor, the payment was not processed online, or your firm prefers to issue funds back to the client by check — you can record the chargeback as a normal withdrawal payment against the contact and use PracticePanther's check printing feature to write the check.
From the white New button, choose New Contact Payment, or open the contact and create a new payment from there.
Select the contact the chargeback applies to and click Next.
Choose Withdrawal as the payment type.
Enter the chargeback details:
Amount — the chargeback amount (full or partial).
Date — the date the chargeback hit your bank account.
Bank account — the operating account the funds were pulled from.
Payment method — Check if you intend to print a physical check, or another method that matches how the funds left your account.
Notes — reference the chargeback (processor case/dispute ID, original payment ID, etc.) so the entry can be reconciled later.
Save the withdrawal payment.
If you are issuing funds back to the client by physical check, use PracticePanther's check printing feature to write and print the check directly from the saved withdrawal payment.
When to use this option: The original payment can no longer be refunded electronically, the chargeback was funded outside of the original online payment record, or your firm needs to send the funds back to the client by check.
PantherAccounting Plus - Handling a chargeback during imported bank transaction review via Plaid
If your firm uses PantherAccounting Plus and the bank feed integration (via Plaid) to import and review bank transactions, the chargeback will appear in your imported transactions list as a withdrawal in your operating account. You'll need to either match it to a transaction you already recorded in PracticePanther (above), or create one on the fly so the imported transaction can be reconciled.
When you reach the chargeback during your imported transaction review, choose the path that matches how you handled the chargeback above:
If you used Option 1 (electronic refund of the original online payment): Match the imported chargeback to the refund you already recorded in PracticePanther. The imported transaction and the refund will tie together so the chargeback isn't double-counted in your bank account balance.
If you used Option 2 (withdrawal payment + check), or if you have not yet recorded the chargeback in PracticePanther: Match the imported chargeback credit to the existing withdrawal you recorded — or, if no offsetting entry exists yet, create the withdrawal (i.e. contact payment) directly from the imported transaction review. This lets you record the withdrawal that has already happened against the appropriate contact in a single step, and the imported transaction will be reconciled at the same time.
Tip: Whichever path you take, make sure the amount, date, and bank account on the PracticePanther entry match the imported transaction exactly so the match can be made cleanly.
Reconciling the chargeback
After recording the chargeback using either option above, take a moment to confirm everything ties out:
The contact's payment history shows the offsetting refund or withdrawal.
Any invoice that was previously paid by the original payment reflects the correct outstanding balance after the reversal.
Any retainer/trust balance that was funded by the original payment is adjusted appropriately.
The bank account in PracticePanther matches the actual funds movement reported by your bank and processor.
If you use the Plaid bank feed, the imported chargeback transaction has been matched to the refund or withdrawal in PracticePanther so the activity is reconciled, not duplicated.
A note is attached to the entry referencing the chargeback case/dispute ID so the transaction is traceable later.
FAQ
Does PracticePanther automatically record chargebacks for me?
Not at this time. Chargebacks must be recorded manually using one of the options above. We are evaluating future enhancements to streamline this process.
Which option should I use?
If the original online payment is still refundable, Option 1 (electronic refund) is generally the cleanest because it ties the reversal to the original transaction. If that is not possible, or if you need to issue funds back by check, use Option 2 (withdrawal payment + check printing).
What if the chargeback is reversed (won) later?
If the chargeback is later resolved in your firm's favor and the funds are returned, record an offsetting deposit contact payment for the same amount, with a note referencing the original chargeback entry, so the contact's balances and your bank account reflect the redeposited funds.
Where do I learn about the chargeback dispute process itself?
For details on the dispute process, working with the PantherPayments Compliance team, and how to prevent chargebacks, see What is a credit card chargeback?
If you have any questions about how to record a specific chargeback scenario, please reach out to our support team.