About the guest writer: Linda Bustos is an editor for CreditorWeb, where you can read information on credit card use and compare credit card offers online. She has some valuable insights on using credit card chargebacks. On the one hand, it’s nice to know that you have a safety net. On the other, there are steps you have to take before doing a chargeback–she explains those and how to document the steps you’ve taken.
Many people are wary of shopping online because they worry about being taken by an online retailer. Buying something sight-unseen from a virtual store is risky, as is sharing your credit card information with a “stranger.” Not only is your personal information at risk, but you may never receive your purchase – for whatever reason.
But one of the benefits of making purchases with credit cards is you have a recourse should there be a delivery problem, billing problem or some other customer service issue such as canceling an order and not receiving a refund. You may request a chargeback from your credit card issuer and get your money back – provided you prove you have tried to resolve the problem with the retailer or service provider.
You must allow the merchant 30 days to refund your money. Don’t bother requesting a chargeback from the credit card company until then. But make sure you have a written agreement that the merchant has promised you a refund, or that you have made every attempt to receive one (some merchants may just not respond to you).
The best thing to do is to use email instead of telephone to communicate. This way you have a record you can simply forward to your credit card company. Some online retailers have live chat customer service, so make sure you copy and paste the text of the chat or print a copy. You can also take a screenshot of your chat window to prove the chat occurred and the date and time of the chat.
A legitimate business will most likely give you your refund to avoid a chargeback situation, because the merchant will not only have to pay back the bank in full, but also an additional fee! Plus, too many chargebacks could mean a merchant’s ability to accept credit card payment is revoked. It can be very difficult to get another merchant account in the future should this happen.
If you ever find yourself in this situation, call your credit card company and explain what measures you took in attempt to resolve your problem with the merchant. In some cases you may have to provide a written statement as well.
You may also have to pay a fee to your bank for requesting the chargeback, so make every effort to get your money back from the seller – and you’ll both save money.
After filing a dispute, your credit card company may take up to 14 days to investigate the matter. You will receive full repayment from your bank if it turns out the seller was in the wrong. Of course, you may end up spending 2 months worth of interest charges while they remain on your account, so it’s a good idea to pay off your balance in full until the whole problem is solved. [Mrs. Micah’s note: The goal when using credit cards is never to carry a balance, so even if it’s a fraudulent charge, it’s better to pay it off while you’re settling it. You should get the money credited to your next bill. Talk to your credit card company about this while reporting the incident or if you’re waiting to hear back from the merchant.]