Refund of a disputed purchase by credit card: chargeback

You paid for a purchase by credit card, but the trader did not perform his obligations or respect the rights of the consumer. Chargeback allows you to reverse your payment order and get a refund for that purchase. It’s a very useful tool these days when shopping is mainly performed using an online trading service.

What is Chargeback?

Chargeback companies allow the holder of a bank card (private or professional) to request from the bank or the company issuing the card the reimbursement of the amount debited during a purchase (good or service) when the professional does has not respected, according to the buyer, his consumer rights.

While the refund request is free, the refund is not guaranteed.

Cases giving rise to the right to a chargeback procedure

European directives have already provided for the right for a buyer to revoke a payment for several years. But global payment card companies (Visa, Mastercard, American Express, etc.) “affiliate networks” have extended these cases:

• product not received, or not as described,
• damaged, deteriorated product,
• credit card theft,
• improper subscription to service following a purchase,
• unauthorized payment, in particular in the case of “hidden subscription”,
• credit card hacking,
• the bankruptcy of the company, etc …
• proven fraud,

Two prerequisites for initiating the chargeback procedure

There are two prerequisites for starting the chargeback process:

• the shopping must have been paid only by credit card (payment by check or bank transfer is excluded),
• the cardholder’s contract must provide for the chargeback guarantee in case of non-delivery of a good, or of service, of a defective product … In that case, it is recommended to refer to the general conditions of its contract.

Chargeback crosses borders

The purchase of the goods or service may have taken place in your country or abroad: what matters to enable the procedure is the geographical coverage provided for in the card contract.

For example, a chargeback procedure can be initiated between a UK buyer and a Canadian seller as soon as the issuing company is present in the UK and Canada (which is the case with Visa, Mastercard, American Express, Paypal, etc.).

A chargeback subject to conditions

The card’s affiliate company should be contacted

The reimbursement request must be sent to the card publishing company with which the cardholder is contractually bound (in practice, mainly the Visa, Mastercard, American Express, and Paypal networks).

To make the request, you must first connect online with this company (Visa, MasterCard, etc.), via its referral form.

 In the form, you must then explain the reason for the complaint and provide all the evidence proving that it is justified.

Chargeback: Good or bad faith?

One of the main difficulties of the chargeback procedure remains, of course, the good faith or bad faith of the plaintiff…. It is this difficulty that explains why affiliate networks and banking intermediaries communicate little about this procedure.

The chargeback process should be initiated promptly, most frequently within 30 days of purchase. For some payment companies, the chargeback is no longer available 90 or 120 days after payment by card.