Chargeback

If a customer pays by card and something goes wrong, such as goods never arriving, being significantly different from what was described, or a payment being taken without permission, they can ask their card issuer to reverse the transaction.

The card issuer investigates using rules set by the card network, such as Visa or Mastercard. If the claim is valid, the money is taken back from the merchant's bank and returned to the customer. The merchant can dispute the chargeback by providing evidence, such as proof of delivery.

For example, a customer who orders a jacket online that never arrives, and who cannot get a response from the seller, might contact their bank and request a chargeback.

Chargeback is a scheme run by the card networks, not a legal right, and there are usually time limits for making a claim, often around 120 days. It applies to both debit and credit cards. In some countries, credit card purchases also have separate legal protections; for example, in the United Kingdom, Section 75 of the Consumer Credit Act makes the card provider jointly liable for purchases between 100 and 30,000. Merchants usually pay fees for each chargeback, and frequent chargebacks can lead to losing the ability to accept cards.