Didn’t Get What You Paid For? How & When to Use a Credit Card Chargeback

Credit cards provide valuable purchase protection for cardholders when goods and services do not meet expectations. The same goes for unauthorized charges appearing on your account statement. This is just one of the many reasons we recommend using a credit card whenever possible.  

If an item arrives damaged or the wrong product was shipped, the company is usually liable to provide the customer a refund. But when a company fails to promptly issue a refund, that's where credit card chargebacks come into play.

The same goes for any charges that you didn't authorize. Credit card fraud is a serious problem globally and it's imperative to protect your financial information. Fortunately, the protections that credit cards come with provide the opportunity to dispute charges you believe to be unauthorized.

There are many scenarios where you're owed a refund for purchases that do not meet expectations, as well as transactions that you didn't authorize. Let's walk through how to request a credit card chargeback.

What is a Credit Card Chargeback?

Think of a chargeback as a remedy provided by your bank through issuing a credit back for transactions that were not promptly refunded to you by the original merchant.

For valid reasons like not having received a package, damaged goods, or getting the wrong item, a customer may request a refund from the original merchant. If the merchant either refuses to refund the customer or does not do so promptly, a customer may dispute a charge.

Disputing a charge is all about providing details about the situation. You'll need to tell the story of when you communicated with the seller, the issue at hand, photo evidence (if possible), and other proof that supports your dispute claim.

The same goes for unauthorized charges. If you did not make a purchase, you could simply state that and ask your credit card company to investigate the matter directly with the merchant making the unauthorized charge.

More recently, a member of our team had to complete a credit card chargeback for a service that wasn't delivered. After enrolling his daughter in tennis lessons, Thrifty Traveler co-founder, Nick, received an email saying the lessons were cancelled and there wouldn't be any refunds as the money had already been spent to pay for previously reserved courts and equipment. 

Thankfully, Nick had paid for the tennis lessons with his *venture x* so he knew he had some recourse. After phoning Capital One and explaining the situation, the representative began the dispute process and almost immediately he had a temporary credit on his account for the money he was out. After the bank was able to confirm that services weren't delivered as paid for, he received an email notifying him of the full refund and that the case was closed. 

But you don't have to call to request a credit card chargeback, you can also do so online. Here's how. 

How to Request a Chargeback

Let's take a look at an example where a flight was purchased and the airline proceeded to go out of business. In 2018, the Danish-owned Primera Air filed for bankruptcy and immediately ceased operations, invalidating the previously purchased ticket. The reservation was rendered useless and there was no way to get a refund from the airline.

From there, you would select “Report a problem”. Depending on your bank, you would simply locate the transaction and initiate a dispute at that point. 

After clicking this button, you'll usually be presented with a series of prompts to report a problem with the charge. The first screen, shown below, asks whether this is an unauthorized charge or the charge is incorrect. Since the ticket purchased with Primera would not be honored, you would select “I recognize this purchase, but it's wrong”. 

You're not telling the bank you didn't make the purchase. You're simply saying there's an issue that needs resolving. 

Next, you'll usually be prompted to give more information on what was wrong with the purchase. Since the passenger making the purchase would not be able to fly due to the airline's bankruptcy, you would select “Never received what was paid for.” The same answer will apply for shipped items that don't arrive in the condition that you expect.

You will be asked to provide further details about any contact made with the merchant. Usually, you want to contact the merchant before you dispute the charge with your bank. Because Primera had shut down operations almost immediately after announcing its bankruptcy, the best way to explain not contacting the merchant was to click “Other” and to describe why the merchant was not contacted. The prompts provide a “merchant was out of business” option, which describes the dispute precisely.

Next, you will be prompted to select the amount being disputed. In this case, you would dispute the full amount of the ticket, as seen below.

The Capital One chargeback process then asked whether the purchase was merchandise or a service. You would select “Service” for the airline ticket transaction being disputed.

Finally, you will be prompted to describe what was purchased. Here, just provide any further information regarding what the purchase was for: a flight on Primera airline. You will also be prompted to include the date for when you expected to receive the service. This could be your flight date or when you expected to receive your package.

Once you submit your Dispute a Charge form, you'll get a confirmation like this page below. Keep your confirmation code until you see the chargeback on your account. Banks will usually provide a temporary credit as they investigate your dispute with your merchant. This could take several weeks to complete.

Sometimes, there will be a really fast turn around! This airline bankruptcy chargeback showed up as a credit to the account for the full amount charged by Primera Air after about a day.

Bottom Line

Each chargeback process will be different for different credit card companies. But the fundamentals still stand true. Try contacting your merchant first, be sure to hold on to any evidence, and compile as much information as you can to provide to your bank.

You may expect a long slog to get your money back, but this process could be quicker and easier than you think.