What is a credit card chargeback?

Summary

• A credit card chargeback is a credit your card provider may issue when you dispute a transaction.
• Chargebacks typically apply to unauthorized charges, billing errors, duplicate charges or purchases that weren’t delivered as promised.
• Contacting the merchant first may help resolve product, delivery or service issues faster.
• Documentation like receipts, order confirmations and merchant messages may help support your dispute.

An unauthorized charge or billing error on your credit card can be frustrating. The same goes for paying for something that never arrives or receiving an item that’s completely different from what you ordered. But there is a possible remedy for these situations: a credit card chargeback.

What’s a chargeback on a credit card?

A credit card chargeback is when your credit card provider reverses a transaction after you dispute a charge. In some cases, your provider may issue a temporary credit while reviewing the dispute. If you win the dispute, the chargeback typically becomes permanent, and the amount is credited back to your account.

Reasons a credit card chargeback may occur

Credit card providers may approve chargebacks for certain types of disputes. For example, you might be able to request a chargeback if a purchase is:

• Unauthorized
• Not received
• Incorrectly billed
• Charged twice
• Not what the merchant promised

Credit card providers usually review disputes and decide whether the charge qualifies for a reversal. Having receipts, order details or messages with the merchant may help support your claim.

Differences between chargebacks and refunds

The main difference between a credit card chargeback and a refund is who handles the request. Chargebacks are handled through your credit card provider after you dispute a transaction. Refunds are handled directly by the merchant, usually because of a return, cancellation or customer service issue.

Refunds are often your first step when you have an issue that the merchant could fix. They’re often quicker than chargebacks, taking a few days or weeks to complete. A chargeback typically takes longer because the card provider needs to investigate your claim.

How do you request a chargeback on a credit card?

Cardmembers usually request a chargeback by disputing a transaction with their credit card provider. However, you may want to contact the merchant first for issues like duplicate charges or missing items. These are problems the merchant may be able to resolve.

If the merchant doesn’t resolve the issue, or if the charge is unauthorized or incorrect, these are the basic steps for requesting a chargeback:

• Gather information. Make sure you have the merchant’s name, the transaction date, and the transaction amount. You might also want to find documentation that supports your claim, such as the receipt, order confirmation, tracking details and communication with the merchant.
• Contact your card provider. You can usually initiate a dispute online, in the mobile app, by phone or by mail. For billing errors and fraudulent transactions, the Consumer Financial Protection Bureau (CFPB) recommends calling the card provider right away and sending a written notice within 60 days after the statement with the error was sent to protect your rights.¹
• Explain the problem clearly. Providers often have forms or online processes that make disputes easy to file. Be sure to answer every question and supply documentation when asked.
• Follow the investigation. After receiving written notice, your card provider generally has 30 days to acknowledge the dispute and two billing cycles to complete the investigation, according to the FDIC.² Be on the lookout for requests for more information during that time.

Remember, a credit for a disputed charge may be temporary. Your card provider needs to review your claim and the merchant’s response before deciding whether to permanently reverse the charge.

When not to request a chargeback

A chargeback is best treated as a formal dispute, not a shortcut around a merchant’s refund policy. That means you shouldn’t request a chargeback if:

• You haven’t tried to resolve a product or service issue with the merchant.
• You’ve simply changed your mind about the product.
• You’ve decided the product no longer fits your budget.
• You want to avoid a cancellation policy, restocking fee or subscription terms you agreed to.
• Your dissatisfaction is over something other than a billing error, unauthorized charge, or failure to deliver what was promised.
• You can’t provide information to support your claims.

Additionally, you want to avoid disputing a charge if the merchant is already processing the refund. In that situation, a chargeback could complicate or delay resolution.

Is a credit card chargeback your next step?

A credit card chargeback may give you a path forward when a transaction is unauthorized, incorrect or not fulfilled as promised. Start with the merchant when it makes sense, keep records of your communication and contact your credit card provider quickly so you don’t miss any important deadlines.