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Most credit card companies have a consumer-friendly policy in place when it comes to getting a refund on purchases that have been deemed unfair or illegal (called a chargeback). However, lenders can refuse a chargeback request for a number of reasons.
- Lying or fraud. If the credit card user is unsure about the chargeback procedure, their lender will inform them on the proper purpose of a chargeback. However, if the lender has any reason to believe that the credit card user is lying about the circumstances that inform their chargeback request or, even worse, is attempting to defraud the credit card company and/or merchant in question, they will cancel the chargeback immediately and allow the charge to be billed to the user’s account. Any borrowers who think that they can get away with erasing a charge from their account must remember that all merchants are given the opportunity to contest a chargeback by providing proof to back up their own side of the story. If they meet the requirements for proof that the credit card lender requires, and it contradicts the user’s version of events, then the lender will side with the merchant.
- Too much time has passed. Credit card users have only a limited period of time to formally lodge a consumer complaint with their lenders in order for a chargeback to be legitimate. The window of time that a lender grants for chargebacks will vary from one issuer to another, but generally credit card holders have up to 60 days from the date of the charge to contest it. Filing a chargeback request during the latter half of this span is not advisable, however, as the lender needs to know about the charge as soon as possible. This means that even if the consumer requests a chargeback within the approved amount of time but does not do it soon enough, they may end up being denied their request anyway. Certain charges require that the card holder wait before their request, most often in cases in which delivery of a good or service is promised within a certain amount of time but is never realised. As soon as the delivery time passes and the merchant is not cooperating with the card holder, then the user should report the charge to their lender and request a chargeback.
- Not notifying merchant first. In the event that a credit card holder contacts their credit card lender about a chargeback but does not first present a query to the merchant about the purchase, then the chargeback stands a good chance of being denied or at the very least suspended until the merchant has a chance to respond. It is often the case that merchants want to correct the problems that arise with their customers rather than being out to get them or steal their money. By giving the merchants a chance to be notified by the customer, there is a good chance that a chargeback will not be needed. However, if the merchant is contacted but refuses to cooperate with the consumer, then they have the right to petition their lender for a chargeback. The merchant may respond more quickly to pressure from the credit card company, or they may refuse to cooperate with the lender as well. Either scenario benefits the credit card user and will probably result in a successful chargeback.
Pauline Hatch
Pauline is a personal finance expert at CreditCard.com.au, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.
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