On Policies that pay an Advance, If the Policyholder cancels within the term of the Advance, a Chargeback can be issued to reclaim months that were paid. Also, if the Issuer has a ‘free look period’, even commissions paid in the first month may need to be paid back, but in this situation usually a negative Premium Transaction is sent to pay back the first month, and the remainder is for the Advance is paid back with a Chargeback.
The Advance may or may not have been paid to the Policy and all its Agents. The Agency may not have paid the Advance out, or individual Agents may have chosen to be paid As Earned. Custom settings can also be used so Agents can be paid different number of months of Advance. When an Agent was not paid an Advance, or the Advance was fully recovered, Chargebacks will still be created, but in those cases, the amount of the Chargebacks would be $0.00.
Chargebacks cannot be applied to a Policy prior to it having gone through a cycle to close at least one time.
Alternate Processing Date
There is a field available in Chargebacks for Alt Processing Date. This is an optional field that can be used to change the date the Chargeback can be processed and still be able to retain the (original) Processing Date. When the Processing Date is changed on one Chargeback, then all Chargebacks for the Policy have the date changed. Using the Alt Processing date allows for a different date to be stored without changing other Chargebacks for the same Policy for other Agents.
Chargeback list page with Add New Chargeback outlined:
Steps to create a Chargeback:
- Policy must have gone through at least one cycle in Comissio.
- Navigate to Menu path: Commissions > Chargebacks.
- Select Add New Chargeback.
- Populate required fields.
- Policy Number (Issuer will populate after the Policy Number is selected)
- Cancellation Date (this will populate the termination field on the Policy Details)
- Processing Date - Processing date defaults to today’s date but some tenants may choose to change to the next cycle date.
- Status of Policy after Chargeback (defaults to Chargeback, will populate Policy Details)
Create New Chargeback detail page displaying details after Policy number entered
- Select Create – this will calculate the amount of Chargeback per Agent, but Chargebacks are only created after Save is selected. For Agent associated with the Policy, it will show the Advance paid, the Advance Recovery generated from Commission Cycles, and the remaining amount that will be the Chargeback Amount. Note the two Agents below that were As Earned and did not receive Advances so will have Chargebacks created for $0.00.
Create New Chargeback detail page – after selecting ‘Create.’
- Select save. The creation page will close, and you will be taken to the Chargeback List page where the individual Chargeback records are displayed.
Chargeback List page
Detail page for Chargebacks
An individual Chargebacks can be viewed/edited by selecting the chevron next to the Chargeback and selecting Edit Chargeback. After the Chargeback is completely applied, the option would say ‘View Chargeback.’
Chargeback List page – highlighted view of line option after selecting the chevron
Chargeback Detail page
Editing a Chargeback
Only the Processing Date, Alt Processing Date, Chargeback Amount, and Note fields can be edited.
The Processing Date can be changed so that it will not be picked up until a later cycle, but changing the Processing Date will change that date for all Agents Chargebacks for the Policy. The Alt Processing Date can be used to enter a date to apply to only a single Agent’s Chargeback for the Policy.
The Chargeback amount can be changed. A Chargeback cannot be reduced below what has already been applied, so if the Chargeback is for $200, and a previous cycle applied $100 towards it, the amount could then only be reduced to $100, which would make the remaining balance $0. It is also good practice to add a note to explain why the amount was changed.
The Status will display if the Chargeback is not currently in a cycle (Open), or picked up in a cycle (Pending), or has been fully applied in cycles (Processed.)
The Chargeback can be deleted if it is in Open Status and has no partial amount paid. If all Chargebacks for a Policy are to be deleted, then each Chargeback created for all Agents associated with the Policy would need to be deleted. The Debit Balance within the Policy would then be opened again and used for any future cycles to create Advance Recovery until the Advance is fully recovered.
Chargeback History
Once a Chargeback is applied in a cycle, the Balance will reflect the amount still open. The details also show the Chargeback History. Cycles where the Chargeback was attempted to be applied to cycles but was not able to be applied will show in history with $0 amount as in the example below.
Chargeback Detail page highlighting partial balance and Chargeback History
Applying Chargebacks in a Cycle
For a Chargeback to be applied to a cycle, the respective Issuer must be selected for the Run.
Run commissions page highlighting Issuer selection.
After the tab for Chargebacks is selected, a popup box will open and allow for changing the percentage to be applied. Typically, it is left at 100% and then if needed, the amounts of Chargebacks applied to individual Agents can be adjusted using the Chargeback Allocation page.
Apply Chargeback popup box in Commission Cycle
After Chargebacks are applied, a notification box will open to say the process to apply Chargebacks is in process. Until it is completed, Adjustments cannot be applied.
When the process of applying Chargebacks is complete, the Chargebacks that were able to be applied will display on the Applied Chargebacks List page.
Applied Chargebacks List page
Chargebacks reduce Net, Current 1099 and Agent Balance. Chargebacks will only be applied If the Agent has enough Net and Agent Balance. Chargebacks will be applied to the point where Net or Agent Balance becomes $0.00. If the Agency desires the Agent not to be left with zero Net, they can use the Chargeback Allocation page to adjust the amount applied in this cycle so that the Agent receives a portion of their Net, and the balance of the Chargeback can be paid in future cycles.
Chargeback Balance in Summary
After applying Chargebacks, the Chargeback Balance and Chargeback Applied amounts are populated in the Summary for all Agents. The Chargeback Balance shows the full balance of all Issuers, not just the Issuers chosen for the cycle.
Summary page with Chargeback Balance and Chargeback Applied highlighted:
Chargeback Allocation Page
The amount of the Chargebacks applied to an Agent can be changed by selecting a line in the Summary for the Agent, or from a Chargeback in the Applied Chargeback List page and selecting View Chargeback Allocations.
Summary page highlighting View Chargeback Allocations from line options
In the allocation page, the applied amount can be reduced or changed and the resulting balances for the Net, Form 1099, and Agent Balance will be displayed for what they would be after the changes in allocation are saved.
Chargeback Allocation page
Chargebacks must be in Open Status to edit. Selecting the icon to view takes the user to the details of the Chargeback but does not allow making changes. To update a Chargeback in Pending Status (in an open cycle), first cancel the cycle run and then the Chargeback would revert to Open Status and allow changes.
There is a Commission Chargeback import.
Chargebacks are created based on balances after the last cycle. If there is an outstanding open Transaction when Chargebacks are created for the Policy, it will not have contributed to the Advance Recovery at the time the Chargeback was created. In that situation, the Agent would essentially come out as though he may have a larger amount in the Chargeback but then would receive commission from the Transaction when it is processed.
Policies in Chargeback status will revert to Open Status if new Transactions are added. If a Policy with Status Chargeback has a new Transaction added for a positive value (Premium or Member Count), the Status will change to Active. If a new Transaction is added that is for a negative value (Premium or Member Count), the Status will remain as Chargeback.
If Chargebacks are deleted for a Policy, the Debit Balance will be reopened, and new commission activity would go to Advance Recovery until the Debit Balance is fully recovered. If Chargebacks are not deleted, even if they are reduced to zero ($0.00), the Debit balances would not be reopened so any new Transactions would go to Earned Commissions. Commissions for a reinstated Policy that had Chargebacks created (and not deleted) will then go to Earned Commission as if it were an As Earned Policy or the Debit Balance had already been paid off.