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Fraudulent Transaction Postings

  • Student
  • 7 posts
  • # 120544

Hi all,

I'm in a pickle and I wondered if you could help me?

We have been notified by two card companies that two sales transactions were made fraudulently with stolen cards.  We are not able to dispute them because of a chain of events that I will not go into (!) but they have issued us with chargebacks. 

I'm not sure how to process this as the amounts for the chargebacks do not match the gross sales.  This is the first time I'm dealing with this sort of thing so I hoped someone could help...

The total gross sales were 13,860 split as 11,700 Amex, 2,160 Visa.

In the first transaction the fraudsters returned an item for 3,250 but the refund was blocked by Worldpay so they did not get the cash back.  Do I process this as a sales return even though it was fraudlent because we have the item back and can resell it?  If so, is the VAT treated in the usual way? 

Amex have deducted a number of fees before issuing the chargeback for the full 11,700 (3,250 mentioned above is part of this).  They took off 700.53 fees leaving us with 10,999.47 to pay back, however they also offset the balance with another (unrelated) sale that had come in taking the balance to 10,920.99 which we have now paid back.  I'm struggling to figure out how to reconcile these transactions especially because they cross over from one month to the next. 

In the second transaction, the fraudsters returned an item for 1,900 and the refund went through to a cash card of their own instead of the one the purchase was made on (they were very clever to have achieved this).  In addition, we were issued with a chargeback of 2,160 from Worldpay that has not yet been paid back.  

If anyone can help me with the postings for the various transactions I would be extremely grateful! 

Best wishes, 

Abbie 

  • Member
  • Practice Licence
  • 19 posts
  • # 120654

Gosh Abbie, 

That is a proper pickle.

I only recently started trading so please bear with me as I am trying to think what I would do.

 

I would take each one individually - the VISA one is fairly straightforward as you are getting the full amount back. 

The AMEX one I would put down as charges for the £700.53 (although I would query that amount as it does seem high to me).   The rest can then be put through as a sales return as there is no real difference between whether it was fraudulent or not. 

The unrelated payment to AMEX should show on the next month so I would just process as normal.  Is it year end? 

 

I hope this helps but it is a tricky one - there may be others better qualified than me who can give a better answer but I didn't want to leave you hanging with this over your head. 

 

Rowena 

  • 1 post
  • # 120795

I am also having trouble with AMEX accounts, if you know a lot, please share some useful policies here. I don't have much time to participate in many other discussions but hope to get some useful information here.

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