What is a chargeback and when should I use it? πŸ€·πŸ»β€β™€οΈ

Maciej Lorek

 Β· 07/04/2018  Β· 07/04/2018

There is a lot of discussion around chargeback so we decided to analyse the whole procedure: what it is, when and how to request it, and how long it takes.

Have you ever ordered something online, but then never received the goods? Or have you ever been charged for a declined transaction? Whatever the scenario, these situations can sometimes be a nightmare to deal with.

But don't lose it just yet; there's light at the end of the tunnel - and this is where chargebacks come in.

So, what is a chargeback exactly? πŸ€”

Chargeback definition:

If you break down the word chargeback, you can pretty much guess that it's nothing more than a charge on your card that gets sent back to your account.

So, in a sense, a chargeback is similar to a refund because your funds are returned to your account. A chargeback differs because the return of funds happens only after you've successfully disputed a completed transaction with the merchant.

But before we talk about disputing transactions, there are a few important things you need to know about chargebacks:

βœ… A chargeback allows you to dispute a transaction with a merchant, if you were charged by mistake or if you were a victim of fraud;

βœ… You should always try to resolve any issues directly with the merchant before requesting a chargeback - this should be reserved as a last resort to recover your funds;

βœ… If all else fails, you can request a chargeback by contacting your bank, but the process itself will be governed by your card network (Visa or MasterCard).

Back to basics - why and when would you dispute a transaction? πŸ‘¨πŸ»β€βš–οΈ

In an ideal world, you would never need to dispute a transaction because everything should work flawlessly, but in reality, things can sometimes go wrong. You may want to dispute a transaction if you:

😠 Get charged for a transaction that was declined by the merchant;
😠 Get charged in the wrong currency when paying the bill at a restaurant;
😠 Get goods delivered that weren't as described, were counterfeit or not delivered at all.

If you find yourself in any of these situations (and many others), you can choose to dispute one or more transactions on your account, by raising a chargeback.

Perfect. How to raise a chargeback πŸ“²

In order to raise a chargeback, you would need to contact your bank. If you have a Revolut account, the easiest way to raise a chargeback is to contact support via the in-app chat, who will guide you through the process. Our agents will assess your claim in order to establish:

β‘  If the transaction is actually eligible for a chargeback claim.
β‘‘ Which type of chargeback should be raised (merchant dispute, fraud etc.)

After a quick investigation, you'll be provided with a link to the chargeback form. This is the most important document in your chargeback case and you must be extremely careful to fill it out thoroughly, by providing open and honest information. Why is that?

βœ… It clarifies the reason for your dispute;
βœ… It provides us with important details to support your case;
βœ… In most cases, the form is the most important documentation we exchange with the merchant.

You will also be asked to attach supporting documentation along with the form.

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What documents should I submit for my chargeback? πŸ“š

Think of raising a chargeback as a court trial, where you take on the role of the plaintiff and your bank becomes your lawyer. The merchant you're disputing the transaction with becomes the defendant and their bank becomes their lawyer. Lastly, the role of the judge will be played by your card network (usually Visa or MasterCard).

And since a chargeback is similar to a day in court, you'll need to provide your financial lawyer (in your case, Revolut) with evidence to support your case. So, before you even begin the chargeback process, you should:

βœ… Collect receipts

We know it's tempting not to ask for the receipt and keep the environment clean, but if anything goes wrong with your transaction, this is another form of proof that can help you build your case.

βœ… Contact the merchant

Always try to resolve a problem with the merchant first, before raising a chargeback and don’t forget to keep records of your conversation. This could come in handy during the dispute.

βœ… Other proofs

There are many other things you can use to support your case. For example, if you were a victim of fraud, you must file a police report and present this during the chargeback.

We can go on and on, but the idea we're trying to instill here is that the more supporting documents you have, the better your chances of winning the chargeback case.

Great. So, what happens next? βš–οΈ

Our agents will submit the case and wait for a response. As soon as the card network reaches a decision, they'll send it back to us and our chargeback team will contact you soon after.

There are two possible outcomes in this instance - the merchant can either accept the chargeback or they can choose to fight it. This means that:

βœ… If the merchant has accepted the chargeback, any amount owed will be instantly credited back to your Revolut account.

🚫 If the merchant has proof against us, they can choose to dispute the chargeback by providing us with documents supporting their decision. If we can counteract their decision, we will ask you for more supporting documents and try to win your case.

How long does it take for a chargeback to be processed? ⏳

Chargebacks rely on a card network (acting as a judge in our financial lawsuit) to determine the outcome of a dispute. This also means that each card network will have slightly different rules and timeframes for providing this service.

Usually, a chargeback must be raised within 120 calendar days from the date of the transaction you're disputing, or from the agreed delivery date of your goods that never arrived.

Once the merchant has received the details of your case they must review it, read all supporting documentation. They have a specific time frame for that which is:

⏱ 45 calendar days from the chargeback date for MasterCard transactions
⏱ 30 calendar days from the chargeback date for Visa transactions

So there you have it! Hopefully you won't actually have to make a chargeback but if you do, you've got all the information you need to make the process as smooth as possible.

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