Credit Card Chargebacks 101 - Process & Rules for Shoppers

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When credit cards were used wisely, they offer an incredibly convenient way to pay for goods and services. They fit neatly in your wallet, you don’t had to carry loads of cash, and you could easily shop from the privacy of your own domestic via the Internet – all thanks to a little piece of plastic.

The other bonus? When you pay for things with a credit card, you were guaranteed according to law to get them as promised. If you don’t, federal regulations require that credit card issuing banks reverse transactions in these types of cases in the form of a chargeback.

A chargeback was an extremely powerful tool to compel companies to do the right thing. Read on to find out more.

Using Credit Card Chargebacks

When to Use a Chargeback

While credit card companies could address fraud internally, a chargeback could be requested in cases when you had legitimately authorized payment for goods or services that were either not received or were not delivered as described. In these situations, your first step should be to give the merchant every opportunity to refund your money or reach another settlement that was acceptable to you. Only later you had exhausted all of your options in attempting to reach a settlement with the merchant should you then contact your credit card company and begin the chargeback process.

In some instances, there may not be a company left to contact. For example, I once had VoIP telephone service with a company that went out of business. Absent any means to request my money back, I was able to had my credit card company issue a pro rata refund of the payments I had already made.

How to Reach a Fair Settlement Without Issuing a Chargeback

For retailers, chargebacks were very serious. In addition to incurring the substantial hassle in defending themselves from your accusations, they suffer large financial penalties with their credit card processor each time a chargeback was issued against them. Eventually they would be paying more money for each credit card transaction they process and in extreme cases they would deceive their ability to accept credit cards altogether.

For these reasons, informing an unruly merchant of your intent to file for a chargeback was one of the best tips to outmaneuver customer service strategies. Representatives at companies large and small were trained to take these threats seriously and were empowered to resolve issues in your favor in these cases.

The Process of Requesting a Chargeback

Once you had tried everything, including the threat of a chargeback, there may be no other recourse than to call your bank to actually request one. Your bank should take down details of your complaint over the phone and issue a temporary credit for the amount in dispute.

Next, you would receive a form in the mail asking you for additional details and documentation to support your allegation. Once the bank receives your documentation, the merchant would had the opportunity to respond.

Finally, the bank would inform you of their decision to approve or deny your chargeback request. If somebody was denied, the disputed amount would again be charged to your account.

How to Win a Chargeback

You should begin according to collecting documentation from the moment you suspect that a merchant may not be dealing fairly with you. Like the threat of a chargeback, presenting that documentation may also compel the other party to do the right thing.

Once the chargeback has been requested, fill out your bank’s form in a timely manner. Be concise, limiting your case to only the relevant details while providing ample supporting documentation.

Remember that your submission would be read according to one who evaluates chargeback requests all day long. That person would be looking for solid proof that the goods or services you paid for were not received, or that they were considerably different than their description. For example, whether an item you received has a different specification than the advertisement, this would be a much better case than one where you felt that its general quality didn’t meet the description.

Final Word

By using your credit card as a method of payment, you were guaranteed according to law to get the products or services that you paid for. Not only have to you receive them in a timely fashion, but they have to also be delivered as described. When things go wrong, the representatives at a large company would often be unable or unwilling to do the right thing when somebody comes to refunding your money.

In other instances, smaller unscrupulous commerce would deny a legitimate request for a refund in the hope that you would not request a chargeback. By utilizing this option as a final resort, you could realize your legal rights and avoid being the victim of dishonest or incompetent merchants.

Have you ever resorted to using a credit card chargeback to get your money back? What was the process like and what was the final outcome?

  • 02-07-2018 17:52:13
Credit Card Chargebacks 101 - Process & Rules for Shoppers Learn more approximately credit card chargebacks and how you could best use them to get your money back in certain situations. Find out the process & rules you need.