How to effectively dispute a credit card chargeback?
A chargeback is a protection tool that helps cardholders from losing money due to fraudulent charges, or unauthorized transactions, or faulty purchase orders.
Before we dive deep into discussing effective ways of disputing a credit card transaction, it is important to first understand what a chargeback is.
What is a Chargeback?
A Chargeback allows a customer to file a dispute against a fraudulent transaction or a transaction they do not recognize on their statement. In the case of fraudulent transactions, the card issuer or bank will investigate the case to find out whether the claim is legitimate or not.
When a dispute is filed against the merchant, it is their responsibility to provide enough evidence to prove the transaction is legitimate. If they fail to do so, the issuing bank will conclude that the transaction was not legitimate, and the disputed amount will be deducted from the merchant’s account, probably with an additional fee (depending on the bank). The amount is then returned to the customer.
- Want to know more about chargeback? Read here
Common Reasons to Dispute a Credit Card Chargeback
There are many reasons to dispute a credit card charge:
Cardholders may get involved in various credit card disputes, resulting from the stolen card, identity theft, illicit card activity, or fraudulent transactions. Technically, such acts are categorized as “unauthorized use”, and when they occur, the cardholder and bank are not held responsible.
You should inform the issuing company immediately if your card is lost or stolen. If an unauthorized charge occurs before you dispute, then you are eligible for a chargeback. More so, in some cases, an unauthorized charge can also happen while you still have the card in your possession. It happens when a criminal obtains your card details – you can dispute these charges as well.
Disputes also happen due to incorrect billing; your monthly statement may include a payment you did not make, a purchase order that you never received, or a merchant made an error by mistake, for instance, you are charged twice for a single purchase. When a billing error occurs, first you need to ask the merchant for a refund, but if the request is denied then you can dispute the chargeback.
Also, in some cases, customers are charged for a product or service they are not aware of, known as “gray charges”. These are charges you agree to pay the merchant when you buy a product or service from them. Some merchants do not inform the customer about these charges, and they are usually mentioned in the Terms and Conditions such as cost creep, automatic renewal, or subscriptions.
Problems with a purchase or return
Sometimes you order something online be it a product or service, but when delivered it does not match the description or your expectations. Also, in some cases, you do not receive the purchased products, or the product was defective. The first option is to contact the seller or merchant, but if the issue is not resolved then you can dispute a chargeback.
A common example of a credit card dispute is flight cancellation. During the initial period of COVID-19, many travelers discovered that canceling a flight booking was not easy and many airlines were not agreeing to a refund. However, if the payment was done by a credit card, they had an option to make a chargeback dispute.
In cases where a small amount of money is involved the risk is less compared to cases with large amounts. If the case is not handled carefully where a large sum of money is at stake, there is a greater chance of losing the chargeback. Therefore, it is important to receive help from people who are experts in solving different kinds of chargeback cases.
How to Dispute a Credit Card Transaction
As a cardholder, you can dispute a credit card transaction in two ways, but the process may vary depending on the credit card company:
- Call the card issuer and explain the reason for disputing a chargeback. A representative will ask for your necessary details to file the dispute.
- Dispute the charge using your online credit card account by filling a form mentioning why you are disputing the chargeback.
Other Important Tips:
- Keeping a regular and diligent check of your credit card bills to avoid any billing errors or unauthorized charges.
- Before filing for a chargeback, inquire whether the purchase was fraudulent or not, to make sure it was not done by a family member without your knowledge.
- Collect all the necessary information about the merchant or fraudulent company such as names, emails, location, messages, emails, phone call recordings, etc to use as evidence to win the chargeback.
- Report unauthorized charges without delaying for more than 60 days from the last billing date.
- If the dispute is related to a purchase done from a card, then the cardholder must approach the merchant first to resolve the issue.
- Fraudulent charges can be reported to the card issuer directly; the cardholder is not liable for more than a $50 charge, which is also waived if the report is made within two billing cycles.
- On average, it takes around 60-90 days to completely resolve the case, but it may differ depending on the card issuer company. So, it is important to dispute the charge as soon as possible.
- Get expert consultation from professionals in the field such as T&H consulting. As you only have one chance to dispute a transaction, receiving a consultation from an expert team on your chargeback case can speed up the process without costing an arm and a leg.
The ability to dispute a chargeback works as big protection for cardholders and it should not be misused. Make sure that your claim is legit and has enough evidence to file the dispute with the card issuer.
T&H Consulting has a team of specialists who are experienced in handling different types of dispute cases and can guide you throughout the chargeback process cycle. If you have a complicated dispute case, contact us for a free 15-minute consultation.