Both refunds and disputes must be handled manually. Famly is not able to process these automatically in the app. This guide explains how to handle refunds and disputes correctly, and what to expect in each situation.
What Is a Refund?
A refund is when you return money to a parent for a payment they have already made. This might be needed in situations such as:
A child leaves unexpectedly, and the parent has overpaid
A parent accidentally pays too much
A service issue or complaint needs to be resolved
A discount or voucher was not applied correctly
💡 Refunds must be processed outside of Famly, either through your bank or your payment processor. Once the refund has been completed, you should record it in Famly to keep your accounts accurate
Alternatives to Refunds
Before issuing a refund, it may be worth considering whether one of the following alternatives would work better.
1. Offering a discount
You can apply a discount to a future invoice instead of refunding money.
How to do this:
Agree on the discount amount with the parent
Apply the discount to their next invoice in Famly
Record the reason for the discount in the notes
2. Applying credit to future invoices
Another option is to apply the overpayment as credit.
How to do this:
Record the overpayment as a credit in Famly
Apply the credit when creating the next invoice
Let the parent know how much credit they have available
3. Managing the refund outside Famly and updating the balance
If you refund the money directly, you can reflect this in Famly.
How to do this:
Transfer the money back to the parent via bank transfer
Record a negative payment in Famly to reflect the refund
Add detailed notes explaining the transaction
Keep proof of the bank transfer for your records
Discussing these options with parents can sometimes save time and reduce administrative work, while still resolving the issue fairly.
Understanding Disputes
What Is a Dispute?
A dispute, also known as a chargeback, occurs when a parent contacts their bank or card provider to reverse a payment.
Common reasons disputes happen include:
The parent does not recognise the charge on their statement
The parent claims they did not authorise the payment
The parent believes the service was not provided as agreed
The parent is unhappy with the service and wants their money back
In rare cases, genuine fraud
What Happens When a Dispute Is Filed?
When a dispute is raised:
The parent contacts their bank, not the nursery
The bank immediately withdraws the funds from your Stripe account
You receive an email from Famly Support with details and next steps
You are given a limited time to submit evidence
The bank reviews the evidence and makes a decision
If you win, the funds are returned to you
If you lose, the funds are permanently lost
💡 ACH payments are always lost in disputes. There is no option to submit evidence for ACH chargebacks
How Disputes Affect You
Financial impact
Funds are withdrawn immediately, before a decision is made
If you lose, you lose the payment amount
If you win, the funds are returned, but time and effort are still required
Operational impact
Time spent gathering evidence and responding
Additional administrative work
Potential strain on your relationship with the parent
When a Parent Disputes a Payment
You'll be notified: If a parent has disputed a payment, we'll reach out to you to help you respond.
What we need from you: Evidence to support that the payment was legitimate and the service was provided (see "Gather Evidence" section below).
How to Respond to a Dispute
Step 1: Understand the Dispute Reason
Reason | What it means | Evidence needed |
Unrecognised charge | Parent does not recognise the payment | Invoices, service records, communication |
Service not received | Parent claims child did not attend | Attendance records, registers, photos |
Duplicate charge | Parent believes they were charged twice | Payment records showing a single charge |
Incorrect amount | Parent disputes the amount charged | Invoice and fee schedule |
Fraudulent | Genuine fraud, rare | Proof of authorisation and sign-in records |
Step 2: Gather Evidence
You should collect as much supporting evidence as possible, including:
Invoices
Clear and detailed
Matching the payment amount
Showing service dates and charges
Proof of service delivery
Attendance records
Registers
Photos or learning stories, where appropriate
Staff notes or observations
Communication with the parent
Emails or messages about invoices
Any discussions relating to payments
Acknowledgement of charges
Payment authorisation
Proof the parent set up the payment method
Agreement to payment terms
Signed contracts or agreements
Terms and conditions
Payment terms
Cancellation policy
Fee schedule
Step 3: Submit Your Response
Contact Famly Support via in-app chat or email at support@famly.co. Share all evidence you have gathered, and the support team will help you submit the response to the bank.
Step 4: Wait for the Decision
Typical timeline:
Bank review: 30–90 days
Possible outcomes:
You win, and funds are returned
You lose, and funds remain with the parent
A split decision is made, which is rare
Decisions are usually final and cannot be appealed.
Preventing Disputes
Preventing disputes is always easier than resolving them. Clear communication, accurate records, and making sure parents understand what they are being charged for can significantly reduce the risk of chargebacks. The tips below can help you avoid disputes and protect your setting if one does occur.
Communication best practices
Send clear, detailed invoices
Include an itemised breakdown, clear dates of service, visible due dates, and contact details for any questions.
Use recognisable statement descriptors
Set a custom descriptor in your payment settings and use a nursery name parents will recognise, for example “Sunny Days Nursery” rather than a legal trading name.
Respond quickly to parent questions
Address queries about charges, invoices, or services as soon as possible, ideally before a parent contacts their bank.
Keep good records
Maintain accurate attendance records, communication logs, service delivery notes, and payment history.
Be transparent about fees
Clearly communicate late payment fees, cancellation fees, additional charges, and any upcoming fee changes in advance.
Red flags for potential disputes
Watch out for parents who:
Repeatedly question charges or invoices
Express ongoing dissatisfaction with the service
Delay payments and then make a sudden payment
Stop responding to messages or emails
Mention contacting their bank
If you notice any of these red flags:
Reach out proactively to discuss their concerns
Try to resolve issues before they escalate
Keep detailed records of all communication
Consider a face-to-face conversation where appropriate
Offer alternatives such as discounts or credits before a dispute is raised
If you notice these signs, reach out early, document communication, and try to resolve concerns before they escalate.
Contract Protection
Clear contracts help prevent disputes and provide important protection if a payment is challenged. Making sure parents understand and agree to your terms sets clear expectations from the start.
Your parent contracts should clearly include:
Payment terms
Fee schedules
Cancellation policies
A dispute resolution process, encouraging parents to contact you first
An agreement to pay for services delivered
Having parents sign the contract provides:
Clear evidence that the parent agreed to your terms
Stronger protection if a dispute is raised
A shared understanding of expectations on both sides
Well-documented contracts can make a significant difference when responding to disputes and chargebacks.