SECTION 3.15.2: CHARGEBACK ALLOCATION, MERCHANT INDEMNITY & FEES

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Section 3.15.2: Chargeback Allocation, Merchant Indemnity & Fees
Chargeback risk allocation, $50 administrative fees, bank defense workflows, and merchant liability ledgers.
Category: Payment & Escrow Policy Clause: CLAUSE-3.15.2 Ref Code: ESC-3152-CHARGEBACK-INDEMNITY Tier 3 (High Severity)
Compliance Safe & Safe Harbor Shielded

1. Section Scope & Legal Intent

Establishes merchant chargeback liability allocation, retrieval request defense protocols, mandatory processor fee reimbursements, and merchant indemnity liens.

2. Mandatory Standards & Operating Requirements

All participants subject to this policy must strictly adhere to the following mandatory standards:

  • Merchants bear 100% financial liability for payment card chargebacks resulting from fulfillment failure, non-delivery, counterfeit goods, or descriptive defects.
  • In the event of an external chargeback, the merchant wallet is debited for the full disputed amount plus the standard $50 USD payment network dispute fee.
  • If the merchant provides valid electronic proof of delivery meeting network standards, ePaisay will represent the dispute on the merchant's behalf.

3. Explicit Prohibitions & Violation Triggers

The following actions constitute direct non-compliance and trigger automatic intervention by the Warning and Violation System:

  1. Failing to provide requested shipping documentation to defend an active card network chargeback within 48 hours.
  2. Maintaining a merchant Chargeback-to-Transaction Ratio exceeding 1.0% in any rolling 30-day period.
  3. Refusing to reimburse platform dispute processing fees following an adverse bank chargeback determination.

4. Warning & Violation System Enforcement Matrix

Each violation under this section is mapped directly to the automated warning and sanction ladder:

Violation Code Offense Description Detection Method Severity Tier Cure Window Mandatory Sanction
VIOL-3152-01 Merchant monthly Chargeback-to-Transaction ratio exceeding 1.5%. Card Scheme Compliance Daemon Tier 4 (Critical) Immediate Immediate storefront suspension, rolling reserve increased to 35%, card processing review.
VIOL-3152-02 Failure to provide requested evidence to challenge retrieval request within 48h. Chargeback Defense Portal Timer Tier 2 (Moderate) 48 Hours Dispute defaulted in favor of issuing bank; 1 Strike Point, full deduction assessed.
VIOL-3152-03 Negative wallet balance resulting from multiple simultaneous chargebacks. Daily Finance Ledger Reconciler Tier 3 (High) 7 Days Payouts suspended across all linked accounts; legal collection referral.

5. Platform Safe Harbor & Limitation of Liability

Platform Intermediary Status: ePaisay provides the technological marketplace venue connecting independent counterparties. ePaisay is not a vendor, retailer, agent, or guarantor of any product, service, or transaction governed herein.

Total Disclaimer of Warranties: The platform disclaims all warranties of merchantability, fitness for particular purpose, and non-infringement to the fullest extent permissible by applicable law.

Limitation of Damages: In no event shall ePaisay, its officers, directors, or employees be liable for incidental, indirect, punitive, or consequential damages. Aggregate liability is strictly capped at the lesser of $100 USD or platform fees paid in the preceding three months.

Participant Indemnification: The participant agrees to defend, indemnify, and hold harmless ePaisay against any third-party claims, regulatory penalties, legal fees, or damages arising out of violations of this Section.

Last updated: Oct 01, 2025