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Glossary term

Chargeback

What a chargeback is, how the dispute process works, what qualifies as a valid chargeback reason, and how long the process takes.

What Is a Chargeback?

A chargeback is a forced reversal of a credit card transaction, initiated by the cardholder through the card issuer. When you dispute a charge with your credit card company and win, the issuer takes the money back from the merchant and credits it to your account.

Chargebacks are a fundamental consumer protection built into the credit card system. They exist because credit card transactions involve a middleman (the issuer and payment network) who can enforce the reversal in ways that a direct bank transfer or cash payment cannot.

Valid Reasons to Request a Chargeback

Card networks (Visa, Mastercard, American Express, Discover) define specific reason codes for chargebacks. Common valid reasons:

  • Fraudulent transaction: A charge you did not authorize, typically from a stolen card number
  • Goods or services not received: You paid for something and it was never delivered
  • Item not as described: What you received was materially different from what was advertised
  • Defective merchandise: The item arrived damaged or broken
  • Processing error: Duplicate charge, wrong amount charged, or a return credit never posted
  • Subscription not canceled: Charged after you canceled a subscription

Invalid reasons include: buyer's remorse (you simply changed your mind), dissatisfaction with a product you received as described, or forgetting you made a purchase.

How to File a Dispute

  1. Contact the merchant first. Most disputes are resolved fastest by going to the merchant directly. This is typically faster than a chargeback and preserves the merchant relationship.

  2. If the merchant does not resolve the issue, contact your card issuer. Most issuers allow disputes online, through the app, or by phone. Provide the transaction amount, date, merchant name, and reason for the dispute.

  3. The issuer investigates. They may issue a provisional credit to your account during the investigation.

  4. The merchant has the opportunity to respond with evidence. If they cannot prove the charge was valid, the chargeback is ruled in your favor.

Timing

You have approximately 60 to 120 days from the transaction date to file a dispute, depending on the reason code and your card network. The sooner you file, the better.

The resolution process typically takes 30 to 90 days. During investigation, the provisional credit is on your account but can be reversed if the merchant provides compelling evidence.

What Chargebacks Are Not

A chargeback is not the same as a merchant-initiated refund. A refund is the merchant voluntarily returning your money. A chargeback is you forcing the reversal through your bank.

Using chargebacks fraudulently (claiming you did not receive something you did receive, or claiming a charge is unauthorized when it was not) is considered first-party fraud and can result in account closure or legal consequences.

See also: dispute.

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