How chargeback can protect you
When you buy something with a debit or credit card, you are protected through something called chargeback. Our guide explains how it works
Key takeaways
Chargeback allows you to seek a refund directly from your card provider when goods or services you’ve paid for don’t meet expectations
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 (overcharging, retailer bankruptcy, unauthorized transactions)
Sometimes when you buy something, it may not arrive, or it may come faulty. Find out how you can get your money back with chargeback.
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.
The product is faulty or damaged upon arrival.
You've received something significantly different from what was described.
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.
Diverse Situations for Chargeback Claims
Whether you've been overcharged, the retailer has declared bankruptcy, or you've noticed unauthorized transactions on your statement, chargeback is versatile. It's a tool that can be wielded in various unfortunate financial situations.
Legal vs. Voluntary Protection
While Section 75 claims are legally binding for credit card purchases within a specific price range, chargeback is more of a policy of good practice. It applies to credit, debit, and even prepaid cards without a minimum or maximum transaction limit.
How to 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.
Remember, you typically have 120 days to make a claim, with some exceptions for future services.
Timeframes and Expectations
Don’t expect a chargeback to be processed overnight. It can take 30-45 days, sometimes longer. If it exceeds eight weeks, don't hesitate to follow up.
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.
Rejected Claims and Next Steps
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.
Chargeback Across Card Types
Yes, chargeback isn't exclusive to credit cards. Debit card users can also benefit from this protection, as can those using prepaid cards from networks like Visa and MasterCard.
With a credit card, you’ll have both chargeback and Section 75 protection when you buy goods and services. That’s why credit cards can be ideal for booking large ticket items, such as holidays, day trips, sports events and theatre tickets, among other things.
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:
Guide to credit card protection
How many credit cards can you have?
A guide to credit card charges
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