A credit card chargeback is a process in which someone disputes a charge to their credit card account, hoping to not have to pay the amount in question or to get a refund from their card issuer. Chargebacks are usually initiated by cardholders who believe they were wrongly charged by a merchant. The cardholder has 60 days after receiving their credit card statement to notify the card issuer of the error. The issuer then has 90 days to resolve the situation one way or another.
If the issuer rules in favor of the merchant, the disputed charge will stay on the cardholder’s bill. But if they rule in favor of the cardholder, the payment to the merchant is voided, and removed from the customer’s account. The word “chargeback” is likely a reference to what happens in that latter scenario, when the charge is rolled back instead of being completed.
If you’re thinking about disputing a credit card charge, there are a few more details about the process that will be helpful to know.
A few things to keep in mind before attempting a credit card chargeback:
A chargeback is for unauthorized charges, damaged or unreceived items, and merchant errors – not for buyer’s remorse. The process can be long, too. So if there’s an error, try resolving the dispute with the merchant first. If you believe you’ve been charged in error by a merchant you frequent, the merchant will probably be responsive, and you may be able to clear up the mistake faster – and more amicably. If all goes well, the merchant will void the transaction, and it won’t show up on your monthly statement.
Find your receipts – you’ll need them. Credit card receipts are used to determine who is correct when there’s a disputed charge, so it is a good idea to save them. For instance, say an online merchant sent a customer the wrong item, and the merchant refused to correct the error. If the customer has the email receipt, they could prove what they actually bought.
It’s possible that your credit card information has been stolen. If you see charges on your statement from a merchant you’ve never done business with, you may be the victim of identity theft. You should alert your card issuer as soon possible, so they can cancel your card and send you a new one. You should also keep eye on your credit reports, so you can dispute fraudulent information. You may even want to put a freeze on your reports to keep unauthorized individuals from applying for credit in your name. And there are a few other steps you could take, too, such as changing the passwords to your email and key financial accounts.
It’s important to keep in mind that chargebacks can’t be used to avoid paying for things you purchased legitimately. For example, if you didn’t like the taste of a meal at a restaurant, that’s not a reason to dispute the charge. Those things should be taken up with the merchant directly.
However, both merchants and card issuers usually are eager to help customers resolve any wrongful charges. Just make sure to check your statements carefully and register disputes as soon as possible, since you only have 60 days to do so.
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