Chargeback: Using Your Credit Card Issuer to Settle Retailer Disputes

Credit cards in wallet

When and how to look beyond a retailer for resolution

27/03/2019

Sometimes, through no fault of our own, we have a dispute with a retailer that we can’t resolve directly. Reasonable retailers will want you to be happy with your purchase, but there are exceptions. Let’s look at the most common valid reasons someone might want to involve their credit card company in a dispute and then look at how to accomplish this and what to expect. These disputes most often arise from online transactions but the same guidance applies to in-store purchases. The process is generally called 'chargeback'. 

Company In Administration

If the company you purchased goods on your credit card from has gone bust, then you can make a chargeback claim to your card issuer. You should make sure the company has officially gone into administration, and inform your bank that you wish to make the chargeback claim as soon as possible. The limit on when you can make a claim varies, so it's important not to delay.

Item Not Delivered

A very common issue with online purchases is that the item isn’t delivered at all, yet you’ve been charged on your credit card. If you’re certain you’ve waited enough time, contact the retailer and ask for a refund. If you find yourself getting the runaround or are being told multiple times to simply wait longer, it’s probably time to involve your credit card company. Make a note of each time you’ve called or emailed the retailer regarding the issue and the date you were charged by the retailer and be prepared to provide this information to your credit card issuer as part of the dispute process. If the item is subsequently delivered after you have lodged the dispute with your credit card company, advise them immediately. To do otherwise is to commit fraud.

Item Not As Described

It happens occasionally with online retailers that they misrepresent items on their website and you don’t get what you thought you ordered. When this happens, contact the retailer directly and ask how you return the item for refund. If the retailer refuses your request, it’s often on the grounds that the product is not defective so you’re stuck with it. This is when you will want to involve your credit card issuer. Take a photo of the item you’ve received and if you’re able, take a screen shot of the item you thought you’d purchased, along with any description of that item. Again, note the date your card was charged and be prepared to submit this information as part of your dispute.

On-Going Services Agreements

If you’ve received a free or discounted trial to a service or subscription, chances are it is a self-renewing subscription. This means that after the trial is over, the company will continue to send their product and bill you accordingly. You see this frequently with ongoing meal services, magazine subscriptions, media streaming services, and health and beauty supplies. If you’ve read and understood the cancellation terms and followed the process accordingly but continue to receive the subscription and charges, contact the retailer directly and reiterate when and how you cancelled the service. If they won’t refund any charges you received after properly notifying them of your cancellation, you have valid cause to involve your card issuer.

Item Returned But Not Refunded

If you returned an item as per the retailer’s return policy but the retailer hasn’t provided a refund, contact the retailer one last time. Indicate to them when and how you returned the item and demand to know when the refund will be processed. If you feel you’ve allowed enough time but the retailer isn’t cooperating, you can involve your credit card issuer. Again, note the dates of all your contacts with the retailer and any shipping receipt you may have for returning the item and call your credit card issuer.

What Happens Next

If you have a valid retailer dispute you can’t resolve, call your credit card customer service number and explain your situation. Answer all the questions asked of you as accurately as you can. Offer to provide copies of any correspondence you may have and any photos which may help the dispute. In all cases, the process is fairly similar. You will be told that the charge will be removed from your card while the dispute is in process. Your card issuer will deal directly with the retailer who will have an opportunity to dispute the chargeback. Your card issuer will advise you of a time interval after which you can consider the dispute resolved in your favour.

The retailer may, when pressured, issue their refund, resulting in two refunds being made to your credit card. If this happens, call your credit card issuer who will reverse their initial credit and you will be resolved. It may be that the issuer sides with the retailer and you are charged for the item or subscription. Perhaps the retailer has provided proof that you didn’t abide by the terms and conditions of the sale, or they have a signature for an item you claim wasn’t delivered. Your card issuer will provide you the full facts of the case and you will need to decide if you wish to escalate this further to a manager or ombudsman.

Knowing your rights in these situations is important but equally important is to understand the terms that govern your purchase. Not all online retailers are the same so take the time to suss out the information you need to proceed with your purchase confidently and use the credit card chargeback as a last resort.

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