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.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
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:
- Contact your provider and explain the charge you want reversed.
- Fill out a chargeback or dispute form.
- 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.
More guides on Finder
Nexo review: Is it safe for high interest returns?
Nexo is a cryptocurrency lending and borrowing platform that offers high interest rates on cryptocurrencies, stablecoins and fiat. We review the features available and look at how safe your funds would be on the platform.
Citi Clear Credit Card – Exclusive Offer
This Citi Clear Credit Card offer includes 0% on balance transfers for 28 months and a reduced first-year annual fee. Compare and apply here.
Finder Awards 2021: Best credit cards revealed
Australia's best unveiled across 6 categories. Switch to a better card today!
BankSA Vertigo – Cashback Offer
The BankSA Vertigo card offers $300 cashback, a waived first-year annual fee and a low ongoing purchase interest rate.
St.George Vertigo Card – Cashback Offer
This card offers a low ongoing purchase interest rate, a $0 first-year annual fee and a $300 cashback offer.
Bank of Melbourne Vertigo Card – Cashback Offer
Compare the features of the Bank of Melbourne Vertigo credit card, including a $0 first-year annual fee and a $300 cashback.
How to stake DAI
Find out how you can stake DAI, the decentralised stablecoin from MakerDao, and what the risks and potential rewards are.
AFCA approves $240m in refunds and penalties: Could you be due compensation?
New data reveals AFCA received a whopping 70,000 complaints in the last year generating millions of dollars worth of refunds to Aussies.
What are privacy coins? 6 of the biggest compared
Check out our brief look at the technology behind private cryptocurrencies and how to buy them.
July’s best balance transfer credit card offers
Australians are paying interest on over $20 billion of credit card debt, but you can save with one of these 0% balance transfer offers for up to 36 months.
Ask an Expert