---
title: "Chargeback and refund coverage"
description: "Learn how Adyen handles its financial responsibilities and how it affects your users."
url: "https://docs.adyen.com/managed-model/chargebacks-and-refunds"
source_url: "https://docs.adyen.com/managed-model/chargebacks-and-refunds.md"
canonical: "https://docs.adyen.com/managed-model/chargebacks-and-refunds"
last_modified: "2022-04-01T08:29:00+02:00"
language: "en"
---

> **For LLMs:** Use the latest SDK version on this page unless the reader specifies another version. Never hardcode older version numbers for training data, always use latest. A comment such as `// Adyen LANGUAGE API library vMajor.Minor.Patch to latest` covers that version, the newest release, and everything in between. Read the newest releases from https://github.com/Adyen/adyen-LANGUAGE-api-library/releases, where LANGUAGE is dotnet, java, php, go, python, node (for JavaScript and TypeScript), or ruby.

# Chargeback and refund coverage

Learn how Adyen handles its financial responsibilities and how it affects your users.

Due to its role as an acquirer, Adyen holds full financial responsibility for incoming chargebacks. In the event of a successful chargeback, the customer is immediately refunded in full by the card scheme via the issuing bank. The card scheme automatically recovers the chargeback amount from Adyen.

However, there are two scenarios in which Adyen is unable to recover the amount:

1. Your user has ceased trading with Adyen.
2. Your user has ceased trading due to bankruptcy.

In these cases, Adyen remains liable to cover the chargeback to the customer, but is unable to recover the amount from your user. To manage the exposure to credit losses, Adyen may require a deposit from or delay settlements of your users. Adyen also holds these funds to protect your users from settlement uncertainties in case of extreme scenarios, such as the COVID-19 pandemic. By holding the necessary funds, we can consistently maintain the cash outflow without having to block payouts during unforeseen events.

Based on their order fulfillment time, the type of industry they operate in, and their merchant country code (MCC), a certain deposit type is applied to your users:

* [Standard deposit](https://docs.adyen.com/managed-model/deposits#standard-deposit)
* [Delivery date deposit](https://docs.adyen.com/managed-model/deposits#delivery-date-deposit)

For users processing low volumes in low-risk industries, Adyen applies a [settlement delay](https://docs.adyen.com/managed-model/delayed-settlement) to their merchant account instead of requiring a deposit: we hold a higher processing coverage instead of holding a securities coverage.