This guide explains how to recover a chargeback from an Owner's income in Owner Accounting, and how to record the receipt and refund so the Three-Way Balance stays correct.

A chargeback happens when a cardholder disputes a card payment and the issuing bank takes the funds back from the property. If the booking belongs to an Owner, the Owner's income for that booking has already been recorded, so the chargeback must also be recovered from the Owner. In RMS, you do this with a Third Party Charge on the Owner's AdHoc account, then you receipt and refund the amount on the reservation to mirror the chargeback.

You can process the chargeback as soon as the bank takes the funds, or wait until the dispute outcome is confirmed. Waiting is optional and depends on your preference, and it adds one step: a temporary adjustment that keeps the Three-Way Balance correct until you process the chargeback. If you process the chargeback on the same day it is received, no adjustment is needed.

The steps below cover the Owner Accounting side of a chargeback only. To view, accept or defend a chargeback issued through RMS Pay, see Chargebacks.

Prerequisites

• The property uses Owner Accounting, and your Security Profile allows access to Owner Accounting.
• The reservation number, the Owner and the chargeback amount.
• Enough income in the Owner's account to cover the chargeback. A Third Party Payment cannot be completed without available income.

Set Up the Chargeback Third Party and Sundry Charge (One-Off)

The chargeback Third Party and its Sundry Charge only need to be created once. After that, you reuse them for every chargeback.

1. In the side menu of RMS, go to Reservations > Guest Search and select Add.
2. Select the Guest Type Third Party, select the Property, and enter Chargeback as the Business Name (in the Surname field).
3. Enter an email address for the Third Party. A Third Party must include a property and an email address.
4. Open the Banking tab and enter 999-999 as the dummy bank details. Use numbers only, because most banks hold numeric details. No funds are exchanged between banks, so the details are never used for a real payment.
5. Select Save/Exit.
6. Go to Setup > Accounting > GL Acc Codes and add a GL Acc Code for chargebacks.
7. Go to Setup > Accounting > Sundry and select Add.
8. Enter a Description, such as Chargeback, and select the GL Acc Code you created.
9. Select the Tax Type that matches the property's tax registration. For a property registered for GST in Australia, select Full GST.
10. Open the Owner Accounting tab and tick Select Third Party Guest.
11. Select the Chargeback Third Party, then select the option to pay the Third Party from the Owner Account.
12. Select Save/Exit.

For full setup detail, see Set up a third-party supplier.

Process a Chargeback in Owner Accounting

Processing a chargeback has two parts: recover the amount from the Owner, then receipt and refund the same amount on the reservation.

Recover the Amount From the Owner

Recovering the amount from the Owner means posting the Chargeback sundry to the Owner's AdHoc account and paying it as a Third Party Payment.

1. In the side menu of RMS, go to Reservations > Guest Search.
2. Set the Guest Type to Owner, select the Surname Given search field, and search for the Owner.
3. Select the Owner and select Edit.
4. In the Edit Owner window, select the Owner Accounts icon (the money bag) to list the Owner's accounts.
5. Select the account for the Area the reservation was booked in, then select Go To Account.
6. Select the AdHoc tab, then select Sundry Charge.
7. In Sundry Charge Details, select the Chargeback sundry in Description and enter the chargeback amount in Unit Price.
8. Select Apply/Exit.
9. In the side menu of RMS, go to Owner Accounting > 3rd Party Payments.
10. Select the Chargeback Third Party in 3rd Party Guest, and select the pending charge.
11. In the drop-down above the pending transactions, select Pay 3rd Parties on Gross Income. Most properties use Gross Income. Select Pay 3rd Parties on Nett Income if your property pays third parties on nett income.
12. Select the Pay 3rd Party icon (the arrow in a circle) at the top right of the screen.

Receipt and Refund the Amount on the Reservation

Receipting and refunding the amount on the reservation records the money leaving the bank, and keeps the Three-Way Balance correct.

1. Open the reservation and go to its Extras account.
2. Post a receipt for the chargeback amount, using the Direct Credit payment type. Your property can rename this payment type in its labels, so it may appear under a different name.
3. Post a refund for the same amount from the Extras account, using the Direct Credit payment type.
4. In the side menu of RMS, go to Owner Accounting > Bank Reconciliation.
5. Select Payments in the drop-down at the top of the screen, then select Show UnPresented.
6. Tick the chargeback payment. Its Type is 3rd Party, and its description reads Pay, then the Third Party name, then the date.
7. Select the Mark Presented icon in the top right toolbar.
8. In Presented as at, enter the same date as the payment's Date Banked, then confirm.
9. Build a new Three-Way Balance report to confirm the balance is correct.

Important! A chargeback changes the Owner's income and the trust balances. Check the Owner, the reservation and the amount before you select Pay.

Variations

The Owner Does Not Have Enough Income

When the Owner's account does not hold enough income to cover the chargeback, the Third Party Payment cannot be completed. This also applies when the month has already been closed and the Owner has no funds. Wait until the Owner has enough income, then apply the Third Party Charge to deduct the amount from the Owner's income and replicate the chargeback.

The Chargeback Includes a Management Fee

When a management fee was charged on the chargeback booking, you can reimburse the fee in one of two ways.

• Credit note: Open the Owner's account and select the Manager tab, then select Sundry Charge. In Description, select the credit note sundry your property has set up (see Set up credit notes), enter the Res No and a comment, and enter the management fee as a negative Unit Price. Select Apply/Exit. The credit note appears as a credit on the Manager tab.
• Transfer back to Trust: Manually transfer the management fee back into the Trust Account using General Transfers, then receipt the management fee portion directly into the guest folio. A credit note is not required.

Related Articles

• Third Party Charge
• Set up a third-party supplier
• Set up credit notes
• General Transfers
• Chargebacks
• RMS Pay chargeback FAQs