Chargeback may enable you to get a refund if you’ve paid for something by credit or debit card and you haven’t received what you’ve paid for, or aren’t happy with it.
If you’ve bought something using your credit or debit card and you have a dispute with the retailer or supplier, money is taken without your permission or the goods don’t turn up, you may be able to get a refund from your bank or credit card issuer through something called ‘chargeback’. It’s not a legal right – unlike Section 75 of the Consumer Credit Act – which is consumer protection that covers purchases between £100 and £30,000 made using a credit card. Here’s what you need to know.
How does chargeback work?
If you pay for something using your credit or debit card and you don’t receive the goods you paid for, the company goes bust or you’re charged the wrong amount, you can ask your bank or the company that issued the card to reverse the transaction through ‘chargeback’. The rules say:
- There is no minimum purchase amount on charge. It doesn’t matter if you buy something costing £5 or £500 – you’re still covered by chargeback. However, If the item you’re buying costs more than £100 and you’ve paid by credit card you should make a claim under Section 75 of the Consumer Credit Act instead because this gives you legal protection.
- Although it’s a voluntary scheme, all the major credit and debit card providers have signed up to it. Mastercard and Visa credit cards and Mastercard, Maestro and Visa debit cards are covered by chargeback schemes, as are American Express credit cards.
- There are time limits. You have to make a chargeback claim within 120 days from the date of the transaction.
- It’s not a guaranteed refund. Chargeback is the process by which credit and debit card companies try to recover the money you’ve paid from the retailer or supplier’s account. However, if the card company can’t get the money back itself, it won’t pass it onto you.
- Chargeback claims can be disputed. You may receive a refund from your bank but be told that it could be taken out of your account again if your chargeback claim is disputed. You should be told how long the retailer or supplier has to dispute the transaction and therefore when you can be confident that the money is actually yours.
- Bank staff may not necessarily know about chargeback or apply the rules fairly. Don’t be put off if the bank or credit card issuer’s first response is that you don’t qualify for chargeback. If your bank or credit card company turns you down, you can complain to the Financial Ombudsman Service. It’s free for consumers to use and, if the service finds in favour of you, it can make the bank or credit card company compensate you. Find out more in our guide How to complain about a financial company.
How do I make a chargeback claim?
If the retailer has refused to give you your money back or you can’t get a response from them, you can then start your chargeback claim.
To do this, you simply need to contact your card provider and let them know you want to make a claim. They may be happy to go through the claim process on the telephone, although some providers may have a claim form that they want you to complete. If you have any evidence, such as receipts and any emails or documents which show you’ve tried to recover the money back from the supplier, and you can show these to your provider, this might help speed up your claim.
There’s no specific timeframe for when you should get your money back, but if you haven’t received a response within eight weeks, or you aren’t happy with the outcome, at this point you can complain to the Financial Ombudsman.