Did you know that in the US, one in every 10 adults falls victim to a scam or fraud, and around 23 percent of them lose their money? Usually, such victims resort to chargeback to recover their lost money. If you know what chargeback is and how it works, the chances are high that you’ll get back the amount that was scammed from you.
In 2020, MiDiGATOR reported that fraud-related disputes constituted most chargebacks filed, followed by cardholder disputes. With the ongoing pandemic, online trading and shopping have become more popular, leaving users more prone to scams than ever before. And with new users unaware of scamming tactics getting onboard the internet wave, scammers are having a field day.
If you are one such user who has recently started using the internet or trading, you’re a potential victim. Remember, mistakes happen, and if you ever fall prey to a scam, knowing what to do next is crucial to recover your lost money. So, here’s a primer article on how to raise chargeback on a credit card, debit card, and PayPal.
What Exactly is a Chargeback?
In simplest terms, a chargeback is the reversal of a payment back to the mode of payment directly from the bank. One way to look at chargeback is to consider them akin to conventional refunds. What separates chargebacks from simple refunds is that in the case of the former, the consumer is asking the bank to forcibly remove money from the merchant’s account and returned it to the customer. The customer, on the other hand, is not obligated to return whatever was traded.
The merchant usually is in the dark if a chargeback is filed and wouldn’t know about it until the amount is deducted from the account. In a way, chargebacks are designed to keep shady merchants on their toes and impart a sense of security for customers.
Since chargebacks are more customer-skewed, it’s normal to commit friendly frauds, where customers file for chargeback without clarifying with the merchant first. Remember, chargebacks are to be resorted to only if you have genuinely been scammed and the merchant has refused to refund.
Simply filing a chargeback without first trying to find out a mutually agreed-upon solution, chargebacks are considered friendly frauds on the part of the customers. This is because customers get to keep the products and get a refund, which is akin to stealing. Therefore, customers should first try to communicate with the merchant to arrive at a mutual solution and resort to chargeback only in extreme situations.
Now that you know what chargebacks are and when to resort to chargebacks, here’s how to do a chargeback on some popular payment modes.
How to Do a Chargeback on a Credit Card?
This is probably the safest and easiest way to get a chargeback. In case you have made the purchase using a credit card, you can contact your card issuer and request a chargeback to the same card. In the case of a credit card, even if the merchant refuses to refund, the card issuer might agree to the chargeback and reverse the payment.
To request a chargeback, you’re required to contact your card issuer or bank to file a dispute. Once filed, the issuer or bank will ask for the details of the transaction that you’re challenging and the reason behind it. The bank will then forward the same to the merchant’s card processor and then to the merchant.
The merchant then has two options – accept or reject the chargeback. While the former is easy and the customer gets the chargeback without hassles, the latter requires the merchant to send evidence as to why the transaction is legit.
How to Do a Chargeback on a Debit Card?
With the credit card chargeback, the process is straightforward, and the money stays on the card for the duration of the chargeback. However, it’s a bit complex when the customer makes the transaction using a debit card. In this case, the money is deducted immediately and sent to the merchant. This requires more time and effort to recover the money.
To start a chargeback process for a debit card transaction, customers need to contact the bank and fill out a form. They will be required to provide details like the merchant’s details, transaction details, the amount paid, the evident reason, and the evidence for the dispute.
Once your chargeback is accepted, it will take at least 10 days to roll back to your account, and that is only if your chargeback is accepted.
How to Do a Chargeback on PayPal?
If you have paid through PayPal, you will need to raise chargeback on the credit card used for the transaction through the process mentioned above. However, before filing a chargeback, you can raise a dispute on PayPal itself and move to file a chargeback if the merchant denies refunding. Here’s how you can raise a dispute on PayPal.
You’ll need to log in to PayPal and open a dispute in the Resolution Center within 180 days of the transaction. You can do this by clicking on the “Dispute a Transaction” under “Report a problem” and then selecting the relevant transaction. Once the dispute has been raised, the customer and merchant have 20 days to resolve the same.
So, these were the process to file chargebacks on three major payment modes for online transactions. If you have fallen prey to a scam for the first time, you know what to do next.