What is a chargeback in credit and debit cards and how does it work?
Subscribe to enjoy similar stories. Picture this: you’re browsing your favourite online store when you spot a great deal and make a quick purchase. Days later, a different product arrives.
The platform assures you that the right product will be delivered soon, but weeks pass without an update. You reach out to the seller, but your emails are unanswered. Frustration sets in.
Have you just lost your money? This is where the chargeback feature of your debit or credit card can be useful. A chargeback is a debit or credit card transaction that's reversed by the cardholder's bank after they dispute a charge on their account. This can be for anything from undelivered goods and billing errors to outright fraud.
When you initiate a chargeback, your bank steps in to ensure your hard-earned money isn’t lost. But how exactly does the process work? Also read | Tax breaks, reforms, and returns: Why NRIs are banking big on India The first step is identifying the issue. Maybe you were double-charged for a meal or paid for a service that was never delivered.
Once you notice the problem, you can raise a chargeback request via online banking or by calling your bank’s help line. While the process applies to both credit and debit cards, the deadline to raise a chargeback request can vary from 60 to 180 days, depending on your bank's policies. Most banks require you to contact the merchant and attempt to resolve the issue directly before requesting a chargeback.
After you submit your request, the bank checks if it is valid. If it is, the bank provides you with provisional credit – essentially a temporary refund. Simultaneously, it informs the merchant's bank, which then debits the amount from the merchant and charges them a fee.
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