Chargebacks by Card Companies

A credit card chargeback or debit card chargeback is a reversal of charges. It is a relatively simple transaction, similar to a refund. If you have ever contacted a merchant about an error or wanted to return an item and the merchant agrees, they simply reverse the charges. However, if the merchant and the customer disagree, this leads to a chargeback. 

The chargeback definition applies specifically to credit card transactions. Although people do talk about PayPal chargebacks, the simple term “chargeback” only applies to credit cards and debit cards. Getting funds back from a bank transaction is usually referred to as “wire recall.” 

The amount of time a chargeback can take varies according to the credit card company. For instance, a claim for an Amex chargeback should be made by the customer within 120 days. Once the request has been made, the merchant has 20 days to respond. A chase chargeback may take 60 to 90 days depending on whether it is a credit card or debit card and the nature of the dispute or claim. 

A return item chargeback can be simple as long as both parties agree. However, a chargeback meaning dispute or fraud can be more complicated because the disagreement is settled by each side presenting its case to the issuing bank. Sometimes, one party is unhappy with the decision and the case goes to the courts. 

If a customer provides clear evidence of fraud, the issuing bank usually grants a chargeback right away. However, some cases are not so clear-cut and require evidence that the product was faulty or even that the merchant or broker acted in bad faith. In this case, working with a fund recovery agency is the best bet for chargeback success. 

MyChargeBack experts guide consumers who are dealing with a credit card chargeback. We consult with clients, researchers, brokers, and merchants, and create intelligence reports that will assist in fund recovery.

The Difference Between Fraud and a Dispute

An accurate chargeback definition may hinge on the difference between fraud and a dispute. In clear cases of fraud, the issuing bank will return money to the customer. Examples include the theft of a credit card, errors, and unauthorized charges. If the customer can prove the card was stolen or that they did not authorize the charges, the matter can be solved quickly. 

However, most cases are not so simple. If the customer has authorized the charge and claims that they never received the item, that it was not consistent with what was promised or that it arrived damaged, they will need to provide evidence to the issuing bank. The customer may claim that the provider of a service, such as a broker, is acting in bad faith and is a fraud. 

Although the customer may feel like the merchant or broker is fraudulent, this does not fit the chargeback definition of fraud. Charges are reversed if they were unauthorized. If the customer authorized the charges but is unhappy with the product or service they received, they are initiating a dispute, not a fraud claim. 

In addition, the definition of chargeback fraud is not related to the behavior of the merchant but the customer. One reason the issuing bank requires significant evidence before it allows a chargeback on a customer dispute is the prevalence of chargeback fraud when customers abuse the chargeback process. They suspect that the customer may want to keep an item and get their money back by manufacturing a false complaint.

So, how does a chargeback work?

The  Chargeback Process

The chargeback process has many moving parts and there are several parties involved. The cardholder makes a claim for a credit card chargeback. They send this request to the issuing bank that issues the credit card or debit card. When cardholders contact a credit card company for a chargeback, they are speaking to a representative from the issuing bank. The issuing bank informs the acquiring bank, which is another name for the merchant’s bank. The issuing bank acts as a judge in this case and will render a decision about whether or not to grant a chargeback to the customer. 

Usually, the issuing bank encourages the cardholder who is filing the chargeback complaint to try to work out the dispute directly with the merchant. Naturally, the merchant is rarely enthusiastic about returning money to a customer. MyChargeBack experts have combined decades of experience negotiating with merchants and banks and can simplify the often lengthy process of fund recovery and chargebacks. 

If the merchant will not agree to a chargeback by direct negotiation with the cardholder, filing a request to raise a dispute is the next step. This involves a back-and-forth between the issuing bank and the acquiring bank, which is the merchant’s bank. Once the customer has filed a request to raise a dispute, the issuing bank decides whether the claim is worth pursuing and fits the stipulated criteria for a chargeback. 

If the issuing bank decides the complaint is valid, it will inform the acquiring bank, which will provide the merchant’s response to the chargeback request. Depending on the credit card company, the merchant and the acquiring bank may have anywhere from 45 to 60 days to respond. 

When the merchant has responded to the chargeback request, the issuing bank will make a decision. Either the merchant or the cardholder can dispute the decision of the issuing bank, but in this case, it will likely go to litigation and may no longer be decided by the issuing bank. 

Since litigation can be lengthy, complicated, and expensive, the earlier you can win your chargeback through negotiation, the better. That is why MyChargeBack will save you time and legal fees and will increase your chances of a successful chargeback. 

Criteria for a Chargeback

Credit card companies frequently revise their criteria for chargebacks and customer disputes, and it can be difficult to keep track of these changes. For example, credit card companies are taking fraud and unauthorized charge complaints more seriously, given government warnings about the increase of crypto scams and forex scams, but they are also narrowing their criteria of legitimate customer chargeback claims. 

The main categories for chargeback complaints include: 

  • Fraud
  • Unauthorized charges
  • Erroneous charges
  • Customer disputes

If you have lost money to a fake broker in a crypto scam or if an item you purchased arrives broken, you may feel that that you are a victim of fraud. However, according to the credit card chargeback rules, since these purchases were authorized, they would fall under the heading of customer disputes rather than fraud.

In general, in cases of fraud, such as identity theft or a lost or stolen credit card, unauthorized charges and erroneous charges, it is usually easier to receive chargebacks than in customer disputes. If you can prove that you did not actually make the charges or that they were unauthorized or a mistake, the issuing bank may be amenable to granting a chargeback. 

However, If you authorized the purchase and later realize that you were dealing with an unscrupulous broker or a bad merchant, it is harder, but possible, to get your money back, because the situation is often more subjective and less clear-cut. In those situations, MyChargeBack professionals can help you prove that you are owed a chargeback and that you made the transaction under false pretenses. 

How MyChargeBack Helps

MyChargeBack will analyze your case and make sure that it meets the criteria for a chargeback. These criteria may vary depending on the credit card company’s rules, which change regularly. MyChargeBack experts are current with all of the changes in chargeback rules and regulations and will prepare your case thoroughly. 

Once we have accepted your case and feel that there is a fairly good chance of a successful chargeback, we will ask you to provide the relevant documentation that will be necessary to persuade the issuing bank. This may include:

  • Photos of the time you purchased
  • Copies of all communication with the merchant
  • The merchant’s product descriptions on e-commerce sites
  • A timeline of the purchase, complaints, and merchant responses
  • Terms and conditions issued by the merchant
  • Proof that you discussed the issue with the merchant before making a chargeback claim

To successfully navigate the chargeback process, you need a solid fund recovery agency because the process can be complicated. It is important to keep in mind that customers have many rights, but merchants also have rights. They are concerned about having to refund money and how that impacts their bottom line. 

In addition, merchants and issuing banks are on the lookout for chargeback fraud and customers who try to take advantage of the chargeback process to obtain goods and services from merchants without having to pay for them at the end. Therefore, you need to ensure your case is airtight with relevant and current documentation and the negotiating expertise of MyChargeBack professionals on your side. 

MyChargeBack has engaged with more than 800 banks around the world. We understand the concerns of banks and present our clients’ cases in a language they understand. We have a long track record of success and work for our clients even in the most complex chargeback cases. Talk to MyChargeBack professionals today and take the first step toward chargeback success.

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