If a retailer hasn’t provided the goods or services you paid for, chargeback is a hidden way to get your money back.
It’s a mechanism whereby banks can reverse transactions made on a credit, debit or charge card if there is a breach of contract.
You can make a request for a chargeback if the company is refusing to offer a refund. But bear in mind, this is a voluntary scheme that card providers subscribe to – not a legal right.
When does chargeback come in handy?
Chargeback can be requested if the goods you purchased were defective or not as described, or if they simply never arrive, even if the company has gone bust.
This is because your bank is requesting the money back from the company’s bank, not the company itself.
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Chargeback is also useful if there is an error, such as being charged multiple times or after cancelling a subscription, or if someone fraudulently bought the item with your money.
The retailer will be given the opportunity to dispute your claim, but if you’re unsuccessful, you can appeal to the financial ombudsman.
What cards are covered?
Debit: Visa Debit, Visa Electron, Maestro and Mastercard
Prepaid: Visa and Mastercard
Credit cards: Visa Credit, Mastercard and American Express
How does it work?
Claims can be made via email, online form or written letter, but a good place to start is your bank’s website, which may have a link for “disputed transactions” or “chargeback claims”.
The claim should include the name of the retailer, the date of your purchase and how you paid, a detailed description of the goods and expected delivery dates.
Describe what went wrong, and if this includes returning faulty goods, provide proof.
More evidence may be requested, including invoices, receipts, correspondence and the retailer’s terms and conditions.
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“You need to cite ‘breach of contract’ relating to your consumer rights,” consumer champion Scott Dixon, aka The Complaints Resolver, says.
“You need to push hard on chargebacks as they are often rejected on the first attempt.
“Your bank or credit card provider will reverse the payment and give the retailer an opportunity to present their case.
“Retailers don’t like dealing with chargebacks as they are problematic and costly to resolve.”
Under American Express rules, the retailer has 20 days to dispute the claim, while under Visa and MasterCard rules they have 45 days.
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Must-read caveats
Time limit: You must request a chargeback within 120 days of the date you were due to receive the product. Future events, like plane tickets, are covered by this policy from the date they would be used.
Deposits: Because you are refunded what you paid by card, you won’t get your money back if you just put down the deposit via plastic and paid the rest by a different method.
Credit cards: If your credit card purchase is worth more than £100, you are entitled to legal protection under Section 75, which will pay out the full cost of an item even if you only deposit a single penny.
Mastercard minimum: There’s a £10 minimum spend. This does not apply to Visa or American Express.
PayPal: Chargeback cannot usually be used when paying via PayPal. But it is possible if you have an empty account and pay using your registered debit card because it is easier to prove the amount you paid corresponds with the price of the purchase, according to MoneySavingExpert.
