Credit card chargebacks happen when a customer requests their bank returns their funds for a purchase or when your customer's bank detects a problem with a transaction. They frequently occur when a consumer is unable to obtain a refund directly from you, the merchant, and instead forcibly takes their money back.
What is the chargeback process? Customers dispute a purchase with their issuing bank and request a transaction reversal or chargeback, the bank provides provisional credit while the merchant, issuing bank and acquiring bank validate the claim.
How long can the chargeback process take? It depends on the complexity of the chargeback request and the issuer. The process of investigating a claim typically takes between four weeks and 90 days. However, you may have to wait months to see money back.
Once you've applied for chargeback, it's up to your card provider to contact the supplier's bank to process the refund, which could take time. However, it should not be an open-ended request. If the whole process takes longer than eight weeks, take your case to the Financial Ombudsman.
These are our tips for increasing your chances of winning a chargeback dispute:
The bank examines the transaction based on the customer's claim: The bank is responsible for reviewing the transaction data and evaluating whether the buyer's claim is reasonable. The bank makes a decision: The issuer decides to either reject the inquiry or file a chargeback on the customer's behalf.
Losing a chargeback or even an appeal does not inherently mean that the customer doesn't owe you money. However, if you lose a chargeback and believe a customer owes you, you'll usually need to pursue payment in court.
Basic flow of a chargeback
(On average, a cardholder has between 45-180 days to dispute a charge depending on the card association, and is sometimes able to dispute a year-old if special circumstances are considered such as natural disasters or family emergencies.)
Cardholders have a 120 day chargeback filing window after the transaction processing date. The time limit varies, depending on the reason for the chargeback. Generally speaking, cardholders have 120 days to file a chargeback for issues related to: ... an incorrect transaction code, currency, account number, or amount.
Double refund chargebacks occur when customers contact both the merchant and their bank about a disputed transaction; the merchant approves a refund while the bank initiates a chargeback. ... When a customer asks for a refund, it's always smart to ask if they've contacted their bank already.
A chargeback is a charge that is returned to a payment card after a customer successfully disputes an item on their account statement or transactions report. A chargeback may occur on debit cards (and the underlying bank account) or on credit cards. Chargebacks can be granted to a cardholder for a variety of reasons.
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