What is a credit card chargeback?

If you want to reverse a transaction and can’t get a refund, you may be able to get a credit card chargeback instead.

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A chargeback is a form of consumer protection that helps you get your money back in specific situations. For example, if a business refuses to give you a refund that you're entitled to or if an unauthorised transaction is made. In these cases, a chargeback can reverse the charge that was made to your card.

Whenever you request a chargeback, your credit card provider looks at the details to assess if it’s a valid claim. If the chargeback is approved, the credit card provider will reverse the transaction. If it’s not considered a valid request, it will be denied. So, let's take a look at when you can request a chargeback and how the process works.

When can I request a chargeback?

A chargeback is only available under certain circumstances:

  • Unauthorised transactions. These include unrecognised or fraudulent transactions that appear on your account, which have not been authorised by you or an additional cardholder.
  • Different transaction amounts. If the amount on your account statement doesn’t match the amount on your receipt, you may be eligible for a chargeback.
  • Duplicate processing. This happens when a merchant accidentally charges you twice.
  • Cancelled recurring transactions. This happens when a recurring transaction goes through even though you have cancelled it.
  • Faulty or defective purchases. If your purchase arrives with faults or defects or it’s not as described and the merchant refuses to refund you, then you can request a chargeback.
  • Unfulfilled services. These include services that have been paid for but not rendered. For example, if you booked and paid for a company to clean your home and they never showed up.
  • Missing or undelivered items. This commonly means that the goods have not arrived.
  • Missing refunds for returned items. This happens when the merchant has accepted your return, but fails to process the appropriate refund to your account.

In most cases, your credit card provider will advise you to first approach the merchant directly and try to resolve the issue. This is usually effective since most merchants prefer to avoid chargebacks. If approaching the merchant doesn’t work, you can request a chargeback.

How to request a chargeback

Credit card providers have their own processes for chargebacks, but they usually involve the following steps:

  1. Contact your provider and explain the charge you want reversed.
  2. Fill out a chargeback or dispute form.
  3. Provide relevant documentation as requested (e.g. purchase receipts, account statements, written communication or cancellation of a direct debit).

After submitting your chargeback request, your credit card provider will review it. This usually takes up to eight weeks (but could take longer during the coronavirus pandemic).

If it's approved, your credit card provider will deduct the amount owed from the merchant and credit it back into your account.

When would a credit card chargeback be denied?

Your credit card provider will give you details of your chargeback request, including any reason it is denied. The most common reasons a provider might deny a credit card chargeback include:

  • You provided incorrect or insufficient information. This happens if you made mistakes filling out the chargeback request, lied or did not provide enough required details.
  • You’ve already been compensated. You cannot be compensated twice for the same transaction, so your chargeback will be denied if you have already received a cash refund from the merchant.
  • You’re eligible for an insurance claim. Your chargeback may be denied if you can make an insurance claim.
  • It’s too late to apply. Most issuers have specific time limits for requesting chargebacks. You must apply within your card provider’s specified time limit or your chargeback request will be denied by default.
  • The merchant successfully proves the transaction. During the chargeback investigation process, merchants are given the opportunity to dispute the chargeback request. If they are able to provide evidence that the transaction was correctly processed and that all items were delivered to you in good order, your chargeback request may be denied.

How to deal with a denied chargeback claim

If your credit card chargeback is denied and you think the decision is not fair, you can make a formal complaint to your provider or through the Australian Financial Complaints Authority (AFCA). This is the official dispute resolution scheme for financial services in Australia (previously the Financial Ombudsman Service).

You can lodge a complaint with AFCA online or by calling 1800 931 678. You can also lodge a complaint by mail.

Depending on your circumstances, you may also be able to consider the following options:

  • Submit an insurance claim
  • Contact the merchant directly
  • Look into other dispute or resolution services (for example, those provided by PayPal or eBay if relevant)

Generally, you should have no problem getting a successful credit card chargeback if you apply for it within the eligible period and are careful to provide all the necessary details and documentation. In some cases, your chargeback may be denied because you’re eligible to make an insurance claim for the item. If it gets more complicated than that, you can always file a dispute.

Understanding how the whole chargeback process works beforehand will help ensure that you get what you’re entitled to.

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6 Responses

    Default Gravatar
    VincenzinaApril 24, 2019

    Is reason code 53 for service not received on a chargeback and if it is what is the timeframe for a dispute

      Avatarfinder Customer Care
      JohnApril 25, 2019Staff

      Hi Vincenzina,

      Thank you for reaching out to Finder.

      For most disputes the time frame is 120 days (U.S.) and 180 days (International) from the transaction date of the original sale or the date of discovery of the issue (i.e., defective merchandise). Hope this helps!

      Cheers,
      Reggie

    Default Gravatar
    AnonymooseJanuary 12, 2015

    I ordered something that had a 4 month lead period from Pumaspeed, a car parts company. The people then screwed me over. I had no way to know there was a dispute going to arise from the matter; and statute provides 5 years for civil financial matters. Can banks be compelled by courts to action a charge back?

      Avatarfinder Customer Care
      JonathanJanuary 16, 2015Staff

      Hi Anonymoose,

      Thanks for your question,

      In regards to chargebacks or disputed transactions, this can be achieved through contacting your respective bank, by giving their customer service team a call or visiting a local branch. Please check the details regarding reversing a credit card transaction. If you would like to take legal action it is recommended that you seek legal advice, free legal helplines are available in every state.

      I hope this helps!

      Cheers,
      Jonathan

    Default Gravatar
    JonathanMarch 7, 2014

    If you pay for goods and do not find out they are not being delivered until 7 months later, can you report within 30 days of when you reasonably should have known the contract was not going to be honoured or the goods not going to be supplied?

      Avatarfinder Customer Care
      JacobMarch 7, 2014Staff

      Hi, Johnathan.

      Thanks for your question.

      The time frame starts from when the transaction is charged to your account. The bank adheres to the guidelines set by American Express, Visa and MasterCard. Claims for charge backs can be valid periods between 75 to 125 days from when the transaction takes place. The time frame varies depending on the reason for the charge back. If you think you have a claim for a charge back, you should contact your lending institution immediately.

      I hope this helps.

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