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When should I file a chargeback request against a retailer?

A chargeback can be used by anyone that owns a credit or debit card and has used it to make purchases which have turned out to be inadequate. It gives you the authority to ask your card provider to reverse a transaction made on your credit or debit card.

You are therefore protected if something goes wrong with an order or transaction you have made. You are eligible to use a chargeback for the following reasons:

  • The goods arrive damaged
  • The goods are not as described on the website, in marketing material or by the merchant themselves
  • The goods fail to arrive at all
  • The merchant you have bought from ceases to trade for whatever reason.

If one of the above has affected you, get in touch with the retailer to discuss your order and your concerns. Many retailers have experience dealing with this and in most cases, they will deal with your situation as quickly as possible. If a retailer rejects your request but you think this is unfair, then it is a relatively straightforward process to apply for a chargeback to reclaim money.

You will need to ask your bank to take the money back from the merchant you have purchased from. You should tell them what has happened and why you think you are eligible for a chargeback on the purchase in question.

Chargeback and Section 75

Currently, banks are not legally obliged to process a chargeback request but many card providers, such as Visa and Mastercard, honour them as part of their customer service guarantee.

Chargebacks apply to all goods purchased on debit cards although different providers tend to have slightly different rules. For credit cards, a chargeback can be useful for goods/services under £100 but for all goods over £100, you have rights under Section 75 of the Consumer Credit Act.

Section 75 of the Consumer Credit Act 1974 states that a credit card company is jointly and severally liable for any breach of contract or misrepresentation by a retailer or trader. This section of the Consumer Credit Act covers goods and services that cost over £100 and no more than £30,000.

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When can I use a chargeback?

There are some conditions that apply for chargebacks which could affect whether you will be able to apply for one and whether it will be accepted or not.

  • Did you buy in store or online? – For tangible goods, the time limit usually starts on the day you receive the goods.
  • Time – You will typically have 120 days to apply for a chargeback dependent on the circumstance but this time limit will usually start from the day you become aware of a problem.
  • Flights – If the airline in question falls into insolvency after you have booked, it becomes a breach of contract from the day the flight was due to depart. If the airline told you at an earlier date that the flight would not be going ahead, the breach allows for a chargeback to not apply in these circumstances.

I have been refused a chargeback, what can I do?

All banks should be aware of the consumer guarantee of a chargeback but one common issue is that because they are not used often, it may be likely that the staff member you speak to is unaware of the procedure. However, this should not put you off as you can ask to speak to another member of staff who will be familiar with the procedure.

It can take up to 10 working days for the chargeback request to be processed, after this time if you have not heard anything you should get back in touch with your card provider.

You are not guaranteed to recover the money but if the claim is rejected and you feel that this is unfair and you are owed the money, you can take the case to the Financial Ombudsman within six months of your final correspondence.

PayPal and chargebacks

Chargebacks work slightly differently with worldwide online payments company, PayPal. As PayPal works as a middleman between the merchant and your bank account, there is plenty of protection over your money as a result of the PayPal Buyer and Seller Protection.

When it comes to chargebacks via PayPal, whether you are eligible to apply for one or not, is wholly dependent on the monetary situation of your account on payment.

When you load money into your PayPal account from your bank, this is considered the transaction. If you then use that money to buy goods or services, the transaction will not be classed as a card transaction so you are not eligible for a chargeback but you will be protected by PayPal.

You will be eligible for a chargeback if your PayPal account has no credit balance when you make a purchase. Even though you have used PayPal to handle the payment, it will be classed as a card payment because the money will come straight out of your bank account. This makes it easier for your card provider to match the purchase with the debit and deal with your chargeback request.

For more information on chargebacks or to make a chargeback request, get in touch with your card provider as soon as possible.

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