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How to Do a Chargeback as a Customer

Key takeaways

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How to Do a Chargeback as a Customer

Explore this guide to learn how to initiate a chargeback or dispute with various payment processors, card networks, and banks.
Author
Theodore Covey
Category
General
Date posted
June 13, 2024
Time to read
13
minutes

Though I usually write about chargeback information for businesses, I am a customer outside of my job. Thus, I have been on the “dealing” end of chargebacks. I want to help you (the cardholder) dispute unfair transactions.

I’ll discuss the timeframes (if applicable) for filing chargebacks and how to file chargebacks with different processors, then provide additional information you’d need regarding chargebacks and disputes.

Let’s fight unfair transactions.

Key Takeaways

  • The terms “chargebacks” and “disputes” are often used interchangeably.
  • Dispute a transaction by contacting your bank or card issuer.
  • Act in good faith by trying to resolve with the merchant first.
  • Gather evidence (receipts, emails) to support your claim.
  • Common reasons for chargebacks include fraud, errors, or undelivered items.
  • Chargebacks are not guaranteed, and success rates vary.
  • You can go to jail for committing chargeback fraud.

Important Details (Read First)

Please note that we do not work for any of the platforms that we will cover below. We cannot help you regarding disputes initiated with any company.

Disputes vs. Chargebacks: You Need to Know This

Many institutions, card networks, and payment processors will use disputes and chargebacks interchangeably. For instance, Mastercard refers to the disputes and chargebacks as the same.

When you see “file a dispute,” assume it means “file a chargeback.”

However. The definition gets confusing sometimes. As it will vary by company and blog.

Some will refer to “disputes” as initiating the process of fighting an invalid or unfair transaction. Then, they’d refer to a chargeback as the reversal (return of funds).

Can a Bank Refuse a Chargeback?

Yes. A bank can refuse a chargeback or dispute request if the cardholder has no valid reason to initiate a dispute.

For example, a bank would likely deny a dispute over recurring subscription charges if records show the cardholder initiated and used the service without prior issue.

How to Initiate a Chargeback on Different Platforms

The following sections will provide the general timeframes and steps needed to do a chargeback (aka dispute) on these platforms:

  • Card networks
  • PayPal
  • Banks, credit issuers, and Stripe
  • Revolut
  • Cash App
  • Shopify Payments
  • Venmo

Let’s deal with an unfair transaction.

Always Do This Before Filing a Dispute

The card companies, processors, or banks will have wanted you to attempt to fix your issue before contacting them. Showing that you tried to be reasonable. Failure to do this may hurt your chances of winning a dispute.

Moreover, when talking to the merchant, be respectful. This is critical because the seller will save your conversation as evidence during a dispute. If you use defamatory language, then that will decrease your chances of winning a dispute.

1. Card Networks

Time to file a chargeback: 

  • Visa: 120 days
  • Mastercard: 90 – 120 calendar days (varies by reason code)
  • American Express: 120 days from the date the transaction processed
  • Discover: 120 days

Here’s how to contact different card networks:

  • Visa:some text
  • American Express:some text
    • Call: 1-800-446-6307
    • Send a letter to American Express, P.O. Box 30384, Salt Lake City, UT 84130.
  • Mastercard: You’ll need to contact your bank. From there, they’ll have you complete a Notification of Disputed Transaction form.
  • Discover:some text

Once you get a customer service representative on the phone, follow their instructions to dispute the transaction in question.

2. PayPal

Time to file a chargeback:

  • In General: Within 180 days of your payment date.
  • Significantly Not as Described: 30 days of the delivery date or 180 days after your payment, whichever is soonest.
  • Other Errors and / or Unauthorized Transaction: Within 60 days of receiving your PayPal account statement.

These times can change at any time. Refer to PayPal’s documentation for the most accurate timeframes.

Follow these steps to open a dispute through their website:

  1. Log into PayPal and navigate to the Resolution Center.
  2. Select the payment you want to dispute and click Continue.
  3. Choose the reason that best fits your dispute.
  4. Click Continue.

On the PayPal app, follow these instructions:

  1. Navigate to Recent Activity.
  2. Tap on the transaction in question.
  3. Scroll to the bottom of the page and press Report a Problem.
  4. Choose the issue type.
  5. Tap Submit.

Important Note/s:

  • PayPal requires you to wait at least 7 days since the transaction has passed to file a dispute.
  • Disputes will typically take 14 – 30 or more days.

3. Banks, Credit Card Issuers, Stripe, & Shopify

It’s honestly easier to just look on the back of your credit card for the customer service card to contact. Or to just call your bank.

However, if your card’s stolen or missing, you’re out of luck. But not really.

Call one of these credit card issuers to initiate a dispute:

  • Barclaycard: (877) 523-0478
  • American Express: (800) 446-6307
  • Chase: (866) 564-2262
  • US Bank: (800) 285-8585
  • Citi: (800) 950-5114
  • Discover: (800) 347-2683some text
    • Discover is a bank and a card network.
  • Capital One: (800) 227-4825
  • Wells Fargo: (800) 642-4720
  • Bank of America: (800) 432-1000
  • Royal Bank of Canada (RBC): (800) 769-2511
  • TD Bank: (800) 983-8472

If you’re in Australia and bank with institutions like CommBank, message them through their app.

Folks in New Zealand who bank with ANZ will want to call 0800-269-296. And people in the UK (or anywhere else) who bank with HSBC will want to use their dispute tool.

All these countries have more than a single bank. Yes, I know. However, I wanted to cover the most popular banks, from my knowledge.

Important notes:

  • Read through each institution's rules on what you’ll need to prepare for a dispute. Many of them have checklists.
  • Find out how long after a transaction you have to file a chargeback.

Regarding filing a dispute with Stripe.

Stripe says you need to file a dispute with your bank. They only facilitate fund deductions and facilitate communication between the bank and business.

If you buy something from a store that runs on Shopify (and / or uses Shopify Payments), you’ll need to file the chargeback through your bank or card provider.

4. Revolut

Time to file a chargeback: 120 days from the date of the transaction (they don’t specify).

How to dispute a transaction on the Revolut app:

  1. Navigate to Accounts
  2. Tap See all for Transactions
  3. Pick the transaction in question
  4. Tap Report an issue
  5. Choose the issue that best fits your situation
  6. Tap Submit Chargeback Form

According to Revolut, this process will take 12 or more weeks.

If you’ve fallen victim to fraud, go to your transaction history, find the problematic transaction, tap Report this payment as fraudulent, then complete the form.

5. Cash App

Time to file a chargeback: 60 days of the monthly statement the transaction appears on.

Cash App issues their monthly statement within 5 business days at the end of the month.

Eligibility: 

  • Transaction must be labeled as Complete and not Pending.
  • You can dispute transactions under these circumstances:some text
    • Duplicate orders
    • Unrecognized transactions (or you suspect fraud)
    • Continual charges even after you cancel a subscription.
    • You didn’t receive the goods / services paid for.
    • The seller charged you for an incorrect amount.

How to initiate: 

  1. Tap Activity on your home screen
  2. Select the transaction you want to dispute and press the 3 dots (...) in the screen's upper-right corner.
  3. Tap Need Help & Cash App Support.
  4. Tap Dispute this Transaction.
  5. Fill out the form.

Cash App support will follow up over email. If you can’t fill out the form, call 1 (800) 969-1940 and they’ll help set it up.

To check on your dispute’s status, tap Activity again, select the disputed transaction, and view the payment status to view the details of your dispute.

6. Venmo

Venmo doesn’t specify a timeframe for how long you must file a dispute. However, they do list the steps to file one:

However, they do list the steps to file one:

  • Navigate to the Me tab.
  • Pick the transaction in question.
  • Tap Need Help?
  • Pick the statement that best fits your issue.some text
    • If the transaction is unauthorized (e.g., fraudulent), select Add more.
  • Tap Add then Next.
  • Provide additional information (if needed).
  • Tap Submit Issue.

Venmo may ask you to reset your password afterward.

If you’re disputing a transaction paid using a Venmo Debit Card, you’ll need to contact their customer support through one of these mediums:

  • Call the number on the back of your card.some text
    • Available 8 AM – 8 PM (CT) daily.
    • If your card’s missing, use other contact methods.
  • Chatbot or contact form

Venmo, unlike most processors on this list, actually provides evidence you’ll need for each dispute type:

1. Item Not Received:

  • Item information: Iten name, description, and URL
  • Explanation on why you and the seller couldn’t resolve the issue.

2. Significantly not as described:

  • Show how bad the damage is.
  • Show how the item you got is different from what was advertised.
  • Include pictures of the advertised item and the item you got.
  • Briefly explain how the items are different.
  • Explain why you couldn't fix the problem in person (for items picked up or delivered).

3. Credit not Processed:

  • Proof the seller agreed to give money back
  • Proof the seller wants to but can't give money back
  • Bank statement showing the money was never taken out

4. Duplicate: Proof that the seller charged you for the same item twice.

5. Paid by Other Means: Proof that you paid for the item / service by other means.

6. Incorrect Transaction Amount:

  • Bank statement shows different amount than Venmo
  • Receipt shows different amount than charged

Typical Chargeback Process for Customers

  • Time it Takes to do a Chargeback: 75 – 120 days.

Here’s what the chargeback process will look like for you (a cardholder / account holder):

  1. You initiate a dispute: Contact your bank or credit card issuer to report a problem with a transaction.
  2. Chargeback request: Fill out a chargeback form, providing details about the transaction and the reason for the dispute.some text
    1. They may need to provide supporting documentation, such as receipts or communication with the merchant.
  3. Bank reviews claim: The issuing bank (your bank) reviews the chargeback request and supporting evidence. They may contact the merchant for additional information or clarification.
  4. Provisional credit: If the issuing bank finds the chargeback request valid, they may issue a provisional credit to you, temporarily refunding the disputed amount.
  5. Chargeback filed with network: The issuing bank files the chargeback with the card network (e.g., Visa, Mastercard). The network then forwards the chargeback to the merchant's acquiring bank.
  6. Merchant notified: The acquiring bank notifies the merchant of the chargeback and provides the reason code and supporting documentation.
  7. Merchant responds: The merchant decides whether to fight the chargeback or reverse the transaction.
  8. Chargeback representment: If the merchant provides compelling evidence, they can represent the chargeback to the card network, asking them to reverse the decision.
  9. Network / Issuer reviews evidence: The card network or issuing bank reviews the evidence provided by both the cardholder and the merchant.
  10. Final decision: The card network or issuing bank makes a final decision on the chargeback.

If the chargeback is upheld, the provisional credit becomes permanent. If the chargeback is reversed, the funds are returned to the merchant.

Each card network (Visa, Mastercard, American Express, Discover) has its own set of rules and procedures for chargebacks.

These differences include time limits, reason codes, and the dispute resolution process.

Mastercard, for instance, has the addition of compliance cases. These situations create another process for you and the seller if there are any rule violations during the chargeback.

Summary: The chargeback process involves the cardholder disputing a transaction with their bank, which investigates and may temporarily refund the disputed amount.

What’s a Cardholder’s Odds of Winning?

77% of merchants win an average of 30% of chargebacks across all industries [1]. I couldn’t find specific sources on numbers for customers. However, the aforementioned suggests that many customers win an average of 70% of chargebacks.

This number drops (for shoppers) when it comes to friendly fraud cases. Merchants win 43.82% of chargebacks [2]. That’s because in many scenarios, customers can’t provide sufficient evidence.

However, if you have actually suffered from fraud, when a thief uses your payment information, you have around a 90% chance of winning.

As sellers only have a 9.27% chance with this type of fraud.

As mentioned, the win rate varies by industry and price point. Merchants typically have the lowest win rate with transactions over $300. Then, they have the lowest win rate in the consumer electronics industry.

Here’s What Qualifies as a Chargeback

Like what the title of this section says, here’s what qualifies for a chargeback:

  • Unauthorized transactions: Fraud or transactions not recognized by the cardholder.
  • Goods or services not received as described: Non-delivery of items or services not matching the description.
  • Defective or Damaged Goods: Items arriving broken or not functioning as expected.
  • Billing Errors: Incorrect amounts or duplicate charges.
  • Recurring Payments Not Canceled as Requested: Subscriptions or memberships continuing after cancellation attempts.

A chargeback is a consumer protection mechanism allowing cardholders to dispute transactions under certain circumstances. If you’re in the United Kingdom, you might ask, “isn’t this Section 75?”

Nope.

Chargeback vs. Section 75 (For UK Residents)

Section 75 and chargebacks are consumer protection mechanisms, but they have some key differences:

1. Type of protection: Section 75 is a legal right under the Consumer Credit Act, while a chargeback is a voluntary scheme offered by card issuers. This means that Section 75 claims are legally binding, while chargebacks are not.

2. Time limit: There is no time limit for making a Section 75 claim, but you must make a chargeback claim within 120 days of the transaction.

3. Amount covered: Section 75 covers the full purchase cost, while chargebacks may only cover part of the cost.

4. Card type covered: Section 75 only applies to credit card purchases, while chargebacks can apply to debit and prepaid cards as well.

5. Payment required: You do not need to have paid for the purchase in full to make a Section 75 claim, but you must have paid for the purchase in full to make a chargeback claim.

6. Parties involved: Section 75 claims are made against the credit card issuer, while chargebacks are made against the merchant.

Section 75 is a more comprehensive consumer protection mechanism than a chargeback. However, chargebacks can be a useful tool if you have a problem with a purchase that is not covered by Section 75.

Most Common Chargeback Types

There are 3 types of chargebacks:

Friendly fraud chargebacks occur when a cardholder disputes a legitimate transaction. This type of dispute is technically chargeback fraud, but it’s often unintentional.

This can happen due to:

  • Buyer's remorse
  • Family members making unauthorized purchases
  • Forgetting about the purchase.

An example would be a customer buying a product, then later claiming they never received it to get a refund.

Friendly fraud is the most common type of chargeback in 2023. Making up around 44% of all chargebacks in that year [3].

Merchant error chargebacks occur when the merchant makes a mistake during the transaction. This can include billing errors, processing errors, or shipping errors.

An example would be a shopper being charged twice for the same item.

True fraud (or third-party fraud) chargebacks happen when a transaction is made without the cardholder's authorization. This can include stolen card information or account takeover.

An example would be a thief using a stolen credit card to make a purchase.

Other Questions People Typically Ask

Can a Company Sue Me for a Chargeback?

Some attorneys suggest that you can’t be sued for winning a chargeback [4]. You will need to see the laws in your jurisdiction or contact a lawyer in your area for accurate information.

Can You Go to Jail for Chargebacks?

You can go to jail for committing chargeback fraud. A Florida man got 10 years in prison for commiting chargeback fraud [5]. However the harsh sentence was because he stole $9 million in reversals.

Wrapping Up

The way that you file chargebacks depends on your card issuer and payment processor. While I can’t help you in every specific case, I can help you with improving your odds of winning chargebacks.

Check out a guide we wrote on increasing your chances of winning a chargeback (as a customer).

Sources

Theodore Covey
Educator
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