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Chargeback Credit Card
 Mar 05, 2009

Chargeback credit card issues are not new. This article will review your options when submitting a dispute with your credit card company, in the form of credit card chargeback. Keep reading to learn about  chargeback laws and the best way to handle chargebacks.

On occasion, it happens: You buy something with your credit card and take it home, only to discover that it is poorly made or damaged. This is even more likely if you happen order a product online. Additionally, you may pay for a service, and not actually get the level of quality you expect. In any case, if you feel that a product or service is faulty, or has been misrepresented, you can petition your credit card company to withhold payment or to perform a chargeback – giving you a refund for what you paid.

Going to the credit card company for your refund

It is important to note that before you ask your credit card company to take care of your dispute with a merchant, you must first try to resolve the issue with the seller. First of all, you need to talk to the seller. If you have merchandise, you should try to return it. Even if a merchant’s general policy is to not honor returns, if the product is damaged or defective, there should be a way to exchange the item or get your money back.

If the seller refuses to help you, you should issue your request in writing. Make a record of your initial visit or conversation with the seller (this is easiest if you have been communicating via email). Write down whom you talked to, the date and time, where you were, and the outcome of the conversation. Then compose a letter stating your dispute over the charges. Reference the previous attempts at satisfaction and describe the defects, damage or lapse in service that is prompting your demand of returned payment. Save a copy for yourself, and then send the letter to the seller via certified mail. This is important. You need a solid record that it went through the mail, and the seller received it.

Only after you have taken these steps can you go to your credit card issuer and demand a chargeback. Call the credit card company and explain your case, referencing your efforts to work things out with the merchant. You can even send your case, through registered mail, with copies of correspondence with the seller, to the credit card company. (Use the “billing inquiries” address, rather than the address you send your credit card payment to.) The credit card company can’t charge you interest on charges that end up being refunded.

Things to be aware of under the law when seeking a chargeback

There are some restrictions to getting the chargeback and your refund. Here are some things to keep in mind:

  • You need to dispute the charge within 60 days of the bill with the disputed charge.
  • The merchandise or service should have cost at least $50.
  • You need to have bought the product within 100 miles of your home.

Some credit card companies will waive the above requirements (except the 60 day requirement) if you are a good customer. Some credit card companies, if you do not have a history of requesting chargebacks, and if you regularly pay your credit card bill and make frequent purchases, will allow refunds on purchases made further from home, as well as for less than $50. You will, however, have a difficult time getting a refund through your credit card company on overseas purchases.

Try to get the charge removed before you pay your bill. Once you have paid the bill, it is too late to get your chargeback. When you see that the item has appeared on the bill, call the credit card company immediately. Many companies have a provisional arrangement by which they immediately give you a temporary credit while things are worked out so that you don’t have to pay late or missed payment fees as you try and straighten things out in terms of the chargeback.

You should also understand that getting a refund for defective or damaged merchandise is different from getting fraudulent charges removed from your credit card. Fraudulent charges, which are often the result of identity theft, are handled in a different way.

When you buy something with a credit card, you have certain protections and rights. If a product or service does not meet the agreed-upon conditions, or if a product is damaged or defective, you can get your money back – as long as you make proper efforts and follow the laws and regulations that govern credit card distputes.

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