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Chargeback – what is a chargeback?

Chargeback – what is chargeback and how to use it?

Chargeback is a chargeback procedure that provides protection for customers who pay by card. It allows you to recover funds, for example as a result of problems with the purchased goods. It is worth knowing what it is and how to use it.

What is chargeback?

Chargeback is a chargeback procedure that allows a customer to recover funds from an unauthorized payment card transaction. It is initiated by the customer through the bank that issued the payment card. It is worth noting that this type of refund only applies to card payments. It provides security for their owners, protecting them against dishonest sellers or fraud. The widespread use of online shopping is an opportunity for many people to engage in such practices - sometimes they do not send the goods or the goods are damaged or inconsistent with the description.

The chargeback procedure was introduced by payment organizations such as Visa and Mastercard to build customer trust in card payments. Thanks to it, they can feel safe knowing that if there are problems with the transaction, they can get their money back.

When can you use chargeback?

The chargeback procedure can be triggered in several cases:

the most common cause is an unauthorized transaction, i.e. one to which the cardholder did not consent. This may be the result of card details being stolen or fraud - in such a situation, contacting the bank is necessary;

chargeback is also available if the customer has not received the ordered goods or the service has not been provided in accordance with the contract;

the procedure can also be initiated if the seller refuses to accept the return of goods or complaints, even though the customer has the right to do so;

it is also justified in the case of double debiting of the account;

Chargeback is also used when the seller has made unjustified charges.

Chargeback and return of goods – what is the difference?

Even though chargeback and return of goods are procedures that are intended to protect the consumer's interests, the differences between them are diametrical. Returning goods is a voluntary procedure initiated by the customer directly with the seller when the goods do not meet expectations or the customer has changed his mind. Chargeback, on the other hand, is a chargeback procedure initiated by the customer through the bank when the seller fails to meet his obligations.

Chargeback is therefore a form of complaint and applies only to transactions made by payment card, while the return of goods can be made regardless of the form of payment. How to start the chargeback procedure?

To initiate a chargeback, the customer should first contact the merchant and try to resolve the issue amicably. If this does not bring results, the next step is to report the matter to the bank that issued the card. The institution's representative will ask you to provide evidence confirming the validity of the claim, such as transaction confirmation, correspondence with the seller or complaint documentation. After verification of the application, the bank will start the chargeback procedure and debit the transaction amount to the seller's account.

What does applying for a chargeback look like?

The process may vary depending on the bank, so it is worth contacting its representative in advance to receive detailed instructions. Such a matter can be reported at a branch or online, and most often you need:

personal data of the card owner;

card number;

terminal location data;

information about a defective transaction.

As mentioned earlier, the more evidence the bank receives, the greater the chance for this institution to issue a positive decision.

What are the deadlines for reporting a chargeback?

The deadline for filing a chargeback depends on the reason for the complaint and the regulations of the payment organization. It is usually 120 days from the transaction date. In the case of foreign transactions, this deadline is extended to 180 days. It is worth remembering that the sooner a customer reports a problem, the greater the chance that the case will be considered positively. Therefore, if there are grounds for this, you should not delay starting the chargeback procedure.

Don't expect an immediate response either. The entire procedure may take up to three months. This is because all parties are involved - the bank reads the documentation and the seller is also informed about the complaint. It is his responsibility to prove that he has fulfilled the contract. If it presents convincing arguments, the bank may reject the consumer's complaint. Importantly, the application will not be accepted if the person submitting the complaint makes a mistake - for example, makes a payment to the wrong bank account.

What is worth knowing about the chargeback procedure?

Chargeback is an important tool that protects customers against unfair seller practices and fraud. Thanks to it, payment card holders can feel safe knowing that in the event of problems with the transaction, they can get their money back. However, the chargeback procedure is not only a benefit for customers, but also a challenge for sellers. Therefore, it is so important that both parties to the transaction act honestly and in good faith, and in the event of problems, try to find an amicable solution.

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