How to Handle Chargebacks in Mindbody (MBO) and QuickBooks Online

When you use Mindbody Payments and see chargebacks in your Payouts Report, it is important to know that FlexBooks will not sync these into QuickBooks for you. Here is why, and what to do instead.

Why chargebacks don’t sync automatically

FlexBooks does not sync MB Payments data. We only sync MB Sales data. These are two separate systems.

MB Sales data is what happens at the time of sale. This is what FlexBooks reads.
MB Payments data is what happens later, such as processing fees, payouts and chargebacks.

A chargeback only exists in MB Payments data, so FlexBooks has no way of knowing it happened. We have checked this carefully: a sale that was later charged back still reads as an ordinary approved, settled sale in the data we receive, months afterwards. Nothing about it changes.

That means the income from the original sale stays in your QuickBooks until you take it out.

Where to find your chargebacks

The monthly Mindbody Payouts Report is the only place a chargeback shows up. Look at the TYPE column for the value Chargeback.

Two things to know before you go looking:

A chargeback is not a separate line in your bank feed. Mindbody subtracts it inside an ordinary daily payout, so that day’s deposit is simply smaller than the sales behind it. There is no negative deposit to find and nothing to reclassify.
Do not go looking for negative amounts in the Payouts Report either. The TYPE column is the reliable way to identify one.

Because there is no alert and no bank line, checking this report is a permanent part of your month end. There is no way around it.

What to do in QuickBooks

The chargeback fee needs nothing from you. It is already inside the FEES column of the Payouts Report, so your usual monthly fee entry absorbs it. If you record it separately as well, you will have booked the same fee twice.

Only the sale amount needs an entry of its own. Make a journal entry dated the last day of the month the chargeback appeared in, with two lines:

The income account the original sale was booked to, with the chargeback amount under Debits.
Credit Card Processor, with the same amount under Credits.

The second line is there because Mindbody took the chargeback out of one of your payouts. FlexBooks recorded the full sale into Credit Card Processor, but that money never reached your bank, so without this line it would sit in Credit Card Processor and the account would never come back to zero.

Before you do, check the date of the original sale. A chargeback can land two months or more after the sale. If the original sale is from a period you have already closed or filed, use your fee or bank charges account on the first line instead of reducing this year’s income (the second line is still Credit Card Processor), and talk to whoever prepares your taxes.

To find out which member and which sale a chargeback belongs to, look up the Sale ID from the Payouts Report in Mindbody.

If you also want it reflected in Mindbody

This step is optional. Most businesses do not need it, and it is worth doing if you want the member’s account balance in Mindbody to show the money coming back out.

Create a new payment method in Mindbody called Chargeback.
Refund the original sale using that payment method, so it shows in your Mindbody sales reports.

One warning. That refund is a new transaction dated the day you enter it, so FlexBooks will sync it and it will reduce your income in the current period. If you have already made the journal entry above, you will have reversed the income twice. Pick one route, not both, and if the original sale is from a prior year use the journal entry route instead.

Best practices

Put a review of the Mindbody Payouts Report on your monthly checklist, and look at the TYPE column every time.
Use consistent naming, such as “Chargeback – Sale ID 707”, in your memos so they are easy to trace later.
Note the original sale date on every one, because that is what decides which period it belongs in.

Example

Your Payouts Report for June shows a row with TYPE Chargeback for $250, referencing Sale ID 707.

Look up Sale ID 707 in Mindbody to find the member and what they bought.
Check the date of that original sale. Say it was in May, which is still open.
In QuickBooks, make a journal entry for $250: Debits on the income account that sale was booked to, Credits on Credit Card Processor, with the memo “Chargeback – Sale ID 707”.
Do nothing about the chargeback fee. Your monthly fee entry already covers it.

If you would like help walking through a specific chargeback, contact FlexBooks support with the Sale ID and the month it appeared in.