What is chargeback and how do I use it?
Key takeaways
Chargeback lets you ask your card provider to try to recover money if goods or services are not provided, are faulty, are not as described, or you are charged incorrectly.
Chargeback is voluntary and applies to credit, debit, and prepaid cards. Don't get it confused with Section 75, which is a legal requirement.
It is useful in various financial situations, including overcharging, retailer bankruptcy and unauthorised transactions.
Unfortunately, not every purchase always runs smoothly. Sometimes, when you buy goods or services, they may not be delivered or may arrive faulty.
Alongside your protections through Section 75 of the Consumer Credit Act, chargeback offers a way to get your money back.
What is chargeback?
In the simplest terms, chargeback is a consumer protection mechanism. It's your go-to tool when goods or services you've paid for don't arrive as promised.
It allows you to approach your card provider and ask for a refund directly. This process isn't just about reversing the transaction; it's about ensuring you're not left out of pocket when things go wrong.
How does chargeback work?
When you initiate a chargeback, your bank takes on the role of a financial referee. They may withdraw funds from the retailer's account and credit them back to you.
However, it's not a one-way street. Retailers can – and sometimes do – dispute chargebacks if they believe the claim is without merit.
Chargeback is a voluntary scheme. It is not the same as claiming money back under Section 75 of the Consumer Credit Act.
Section 75 is a legal requirement on credit card providers (but not debit cards) – for purchases over £100 and under £30,000 – and means they have equal liability with the retailer to make sure you are treated fairly.
When can you use chargeback?
There are several scenarios where chargeback can be your ally:
Items you've ordered haven't been delivered
You’ve been overcharged for a purchase
The product is faulty or damaged upon arrival
You've received something significantly different from what was described
You noticed unauthorised transactions on your statement
The retailer has gone bankrupt
You’ve been charged the wrong amount
You don’t recognise a transaction on your statement and want your card provider to investigate
Before you rush to your bank, though, it's worth trying to get a refund directly from the retailer. Only if they refuse, or worse, if they've gone bust, should chargeback be your next course of action.
If you spot a transaction you did not authorise, contact your card provider immediately, as this may be handled as a fraud or disputed-payment claim rather than a standard purchase chargeback.
What's the difference between chargeback and Section 75?
The table below outlines all the key points of difference between the two consumer-protection mechanisms:
Feature | Chargeback | Section 75 |
|---|---|---|
Type | Voluntary scheme (not legally binding) | Legal protection under the Consumer Credit Act |
Coverage | Debit, credit and prepaid cards | Credit cards; can also apply to some point-of-sale loans and catalogue credit |
Eligibility | Goods/services not received, faulty, not as described, refund not paid, wrong amount or payment dispute | Breach of contract or misrepresentation |
Transaction amount | Any amount (no minimum/maximum) | £100 to £30,000 |
Time limit to claim | Typically 120 days from transaction date | Up to six years in England, Wales and Northern Ireland; different limitation rules may apply in Scotland |
Liability | Card issuer tries to recover funds from the merchant | Credit provider jointly liable with the merchant |
Success guarantee | Not guaranteed. It depends on the card-scheme rules, the evidence, and whether the merchant successfully disputes the claim. | Legally enforceable if the criteria are met |
Cost | Free to use | Free to use |
Retailer cooperation | Merchant can dispute the claim under card-scheme rules | Does not require merchant cooperation |
How do I request a chargeback?
If you find yourself needing to request a chargeback, here's what to do:
Contact your card provider and let them know you want to initiate a chargeback
Provide all details of the transaction, including any communication with the seller
Submit your request and wait for the bank to process the refund
If your chargeback claim hits a wall, don't despair. You have the right to complain to your card provider and, if unsatisfied, take your case to the Financial Ombudsman Service
You usually have around 120 days to raise a chargeback, but the start date can vary. It might run from the transaction date, the date you expected to receive the goods or service, or the date you received something faulty or not as described. Contact your card provider as soon as possible so you do not miss the relevant deadline.
How long should I wait to receive my money back?
Don’t expect a chargeback to be processed overnight. It can take 30-45 days, sometimes longer. If it exceeds eight weeks, contact your card provider for an update.
How much can you claim?
In most cases, you can claim the full amount of the transaction. However, different card networks may have their own set of rules, so it's good to be aware of these nuances.
Personal Finance & Insurance Expert
Our expert says
“It’s always helpful to have a layer of consumer protection up your sleeve when you buy things, especially those which cost a lot of money such as holidays.
"However, the protection you have depends on how you pay for an item – if it’s on credit card you’ll get legally binding cover under Section 75 – but if it’s on debit you’ll still get chargeback.
"While chargeback isn’t as bulletproof as it’s not legally binding, it can be useful if you can’t use Section 75."
Other useful guides
We have a range of guides about credit cards for you to read:
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Author
Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
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Victoria Russell
General Manager - Commercial
Vikki has worked across financial services for over 20 years, and for the last 15 years, created and nurtured a career within MoneySuperMarket Group, leading to her current role as General Manager...
