What is a Credit Card Chargeback?

What are chargebacks? Many people may want to know this answer. A chargeback is an action that is taken by a bank to reverse electronic payments. This process includes reversing a payment that was made on your end and then disputing it. Most of these occurrences happen between a customer and the credit card issuing bank. However, sometimes they are issued against consumers for things such as an ATM deposit that was incorrect.

When should a chargeback be used?

More often than not, chargebacks are issued for one or more of the following reasons:

  • Unauthorized use or fraud- This is when someone else uses your card without your permission to purchase goods or services.
  • Goods or services not delivered- This is when you purchased something, but you never received it, or you may have paid for a service that you were never provided.
  • Goods or services were not as described- This is when a good or service that you purchased was physically or materially different from what they were agreed to or described as.
  • Incorrect amount- This is when you were charged for an incorrect amount for a product or service.
  • Return credit not processed- You returned a product or canceled a service within the merchant’s policy but never received the credit for either or.
  • A recurring billing was not stopped- This is when a subscription service continues to bill your card even after you canceled it.

Typically, the ability for a chargeback to occur must happen within 120 days from the date of purchase. They are also not meant as a way to protect you against damage, theft, or loss after you have received a product or as a warranty benefit. However, most credit cards do offer additional protection services for their consumers. They may cover loss, theft, or damage as a part of the benefits offered to you.

Submitting a Chargeback

Even though chargeback prevention is possible, there are still some steps you can take if you must submit a chargeback. You must first identify the transaction that you are questioning and work with the credit card issuing bank to begin the process. Your bank will walk you through what information they need from you no matter how you initiated the chargeback request.

However, you can easily submit a chargeback request directly through your bank’s website. Most large banks will let you begin this process online. Normally, you will be able to dispute a charge via a webpage that lists all of your transactions.

If submitting a request online is not an option, you can simply call your bank via the number listed on the back of your credit card. Most banks will also offer a way for you to contact them online via a customer service chat option. Depending on the nature of your request, your bank may ask for supporting documentation.

Finally, you can submit your request for a chargeback in writing and send it to your bank’s address. This process is likely to take longer than requesting this process via phone or online. Having the ability to resolve billing disputes by issuing a chargeback is one of the best reasons to use your credit card for making purchases on a daily basis. If something were to occur, and you don’t receive a product or a service, you can request a chargeback be filed in hopes of resolving any billing errors.