Credit card companies grant charge backs to customers who have disputed a merchant’s charge for good reasons. The credit card company has a time limited, between 60 and 90 days of the charge appearing on the customer’s bill, for when a charge may be disputed. A merchant must be notified of any potential charge backs before they occur, giving the merchant time to dispute the charges and avoid any potential money loss.
A chargeback is the reversal of a sale. A credit card holder may not have enough funds to cover the charge, and when the credit card company refuses to pay the charges, those charges are charged back to the merchant, along with any penalties and fees that may have occurred. Chargebacks occur when the merchant and consumer cannot reach an agreement.
Notifying the Merchant
The merchant has the right to notified of any chargebacks before they occur. The majority of the time, the bank or credit card company will contact the merchant before applying a chargeback. This is done to eliminate any error on the merchant or customer’s part. If the merchant does not agree with the customer, then the bank or credit card company may apply a credit, and a dispute may be made later.
Disputing the Chargeback
Merchants have the right to dispute any chargeback. When a customer makes a purchase, the merchant receives the customer’s signature agreeing to pay for the charge or bill. If the customer later disputes the charge with his or her credit card company or bank, the merchant will not be paid. The merchant who rendered service or sold an item has the right to be paid, therefore the merchant may dispute any chargeback that occurs with their business.
Demanding the Product Back
If a product was sold, the merchant has the right to request the product back from the customer. Some products may not be returned once used, eaten or worn. In these cases, the merchant has the right to request payment for the products because the customer knew of the merchant’s policy when making the purchase.
Fees Associated with a Chargeback
The merchant has the right to collect on any fees caused by chargeback from the customer or the banking institute that authorized the chargeback. Regulations limit some banks and credit card companies to the number of chargebacks that can be accessed to merchant. If a customer uses the same merchant, and continues to dispute the charges, the bank will be assessed a fee for chargebacks made if the customer ends up owing the charge.
How to Appeal a Chargeback
A chargeback occurs when a customer (or his credit card company) disputes and sends back a charge that was presented to his...
Can a Merchant Sue You for a Chargeback?
Consumers who dispute a credit card charge can open a file with their card issuer. When the credit card company rules in...
What Is a Chargeback Fee?
Chargeback fees can be an expensive part of doing business as a merchant. When you accept a card payment from a customer,...
Credit Card Chargeback Time Limit
A chargeback expends time and stress for just about everyone involved. It is especially burdensome for a credit card merchant, who loses...
What Is a Return Item Chargeback?
A return item chargeback, more commonly known as a credit reversal, allows a consumer who owns a debit or credit card to...
Chargeback Rules for MasterCard
CreditCards.com illustrates a chargeback as a sales transaction that is reversed. A MasterCard customer can dispute a charge, and the credit card...
Credit Card Chargeback Rules
When you see a charge you didn’t make on your credit card statement and call the credit card company to have the...