Credit Card Chargebacks: 5 Easy Steps to Dispute a Transaction

Credit card chargebacks are a way for us to dispute transactions when something goes awry. If you have ordered something online using your credit card, you may have encountered a situation where the package never arrived, the goods were not as described, or the wrong size or colour showed up. So, you contact the vendor but they can’t (or won’t) help you. It’s time to dispute the charge, known as a credit card chargeback.

A credit card chargeback is when a charge is reversed at the request of the cardholder. You can request this in the event of an item not delivered, an order of the wrong amount, a duplicate charge or an unauthorized transaction, among other things.

To protect merchants, credit card chargebacks are only permitted under certain circumstances and there is a process you must follow to prove you are not abusing the system. Your credit card issuer requires supporting documentation such as receipts and proof of communication with the vendor to resolve the issue before requesting a chargeback.

Step 1: Get your facts straight

Make sure you go over every transaction with a fine-toothed comb to ensure your statement accurately reflects your purchases. Next, do further research to determine if it’s a legitimate transaction you forgot about, one that was not labelled as expected, or if it’s fraud. Illegitimate chargebacks can be devastating for businesses and there are related costs to the card issuer as well. To avoid misunderstandings, it is important to ensure that a posted transaction is indeed an error on your credit card statement. Some cardholder errors include:

Wrong transaction posting date

Depending on when the credit card provider posts the transaction or when the merchant sends confirmation of the transaction to the credit card provider, the exact date of the transaction may not match the one on your receipt. In this case, you should check that the amount posted is correct, but there is no need to complete a credit card chargeback process.

Additional costs

At times, you may see that the cost on your credit card statement is different from the one you have on your receipt. In this case, check if the transaction is in a different currency. If this is the case, the credit card provider will likely convert it into your home currency on the credit card statement and may even charge additional foreign exchange (FX) conversion costs.

Wrong merchant name

The merchant’s trading name or legal name may be different than the brand name that they use on their merchandise, website, or other sources. A simple Google search of the name that you see on your credit card statement can confirm whether this was a legitimate transaction or not. If you recognize the name, then nothing further needs to be done. If you don’t, then it is worth calling your card provider to get more details on the merchant before pursuing a credit card chargeback.

Subscriptions

How many times have you subscribed to a one-month trial for a service and then forgot to cancel it? In these cases, you are not eligible for a credit card chargeback. Your best option would be to discuss the situation with the vendor and see if they can provide you with a concession. 

Other authorized users

If you have other authorized users on your credit card account, ask them if they made those charges. In a lot of cases, credit card chargebacks are simply a case of misunderstanding between two authorized users on the same card.

Different location

Some merchants may have their order processing centres in different countries than the one you bought your goods from. In this case, do a quick Google search and check that this new location is indeed affiliated with the merchant you purchased from.

If you have run through the above checklist and believe that the charge you are seeing on your statement is indeed erroneous or fraudulent, then move on to the next step.

Step 2: Contact the merchant

The fastest route to getting your money back is talking to the merchant directly and assessing whether your request fits any of their criteria for processing refunds. For issues such as products that never arrived or double transactions, it is most likely an honest mistake on the part of the merchant. They can quickly reverse it without having to go through a lengthy credit card chargeback process. 

It is in the merchant’s best interests to correct simple mistakes. Reputations depend on positive word of mouth from customers. The quickest way to lose a future sale is by upsetting a customer today!

If you have discussed your issue with the merchant and are not receiving an appropriate response and/or if you find that the charge on your statement is fraudulent, then move on to Step 4. This will require some organization on your part.

Step 3: Compile evidence

Again, a credit card chargeback process requires rigorous, irrefutable evidence for the card provider to approve it. As the consumer, it is on you to provide this evidence in a logical, clear way that builds your case for the chargeback. The best way to do this is to keep a record of all communications with the merchant. This includes including the date of the interaction and a summary of the details of each conversation.

In addition, make sure to include any receipts, confirmations of shipment, proof of return, documentation showing the product /service was not as described, etc. If you corresponded via email, then save the email chain as a separate file to send to the credit card provider when asked. If you interacted via telephone, it may be worthwhile to record the call on your end and direct the card provider’s attention to specific aspects of the call.

Step 4: Complete the chargeback process

Once you have gathered all the evidence you have, it is time to contact the card provider and request a credit card chargeback. Most card providers will have a telephone line for such requests and/or an online banking feature that directs your chargeback request to the appropriate team.

If you are not able to find this information on the company’s website or through a Google search, then look at the back of your credit card and contact the customer service number listed there. The customer service team can then redirect you to the appropriate department.

For easy reference, we have listed the contact details and timeframe allowed for credit card chargeback requests for some of the major credit card providers in Canada. If you don’t find your institution in the list below, visit their website or contact their customer service desk to obtain the information you need.

Step 5: Escalate to an ombudsman if needed

If your credit card chargeback is denied and you disagree with the decision, you can escalate your case by contacting the Ombudsman for Banking Services and Investments (OBSI) or the ADR Chambers Banking Ombuds Office (ADBRO). An ombudsman is an independent organization that reviews complaints by private citizens against institutions. The ombudsman assists with coming to a fair resolution.

Big Bank Chargeback Policies

Different credit card providers have differing policies and actions for credit card chargebacks. Below, we outline the requirements of some of the major institutions in Canada. We also explain how to go about requesting a chargeback from each if needed.

RBC’s Policy

RBC requires you to try to resolve the matter with the merchant first. They also give the merchant up to 20 business days to process and issue your refund. If these conversations are not productive, then file a dispute. Do it directly through RBC Online Banking. Select the disputed transaction and click ‘Dispute Credit Card Transaction’. From there, RBC representatives will review the transaction and facilitate a resolution.

TD’s Policy

TD’s policy also requires you first to contact the merchant for a resolution. If the issue remains unresolved, you can start a dispute through your EasyWeb account within 30 days of your credit card statement date.

Scotiabank’s Policy

If you are unable to reach a resolution with the merchant, you can file a credit card chargeback request. Call 1-800-504-0716 and provide the bank with:

• (i) expected date of service
• (ii) date of last contact with the merchant
• (iii) contact method and merchant response
• (iv) details of the charge from the invoice. 

BMO’s Policy

To be eligible for a credit card chargeback at BMO, you need to meet one or more of the following criteria:

• (i) transaction was not authorized
• (ii) charge was for an incorrect amount
• (iii) charge was levied for the same transaction twice
• (iv) you do not recognize the charge
• (v) you cancelled a subscription and still got charged, and/or
• (vi) you did not receive the merchandise from the merchant and any attempts to contact the merchant have been unsuccessful.

If you meet any of the above criteria, you can file a credit card chargeback directly through Online Banking or by calling 1-800-263-2263.

CIBC’s Policy

CIBC requires you to contact the merchant first. If a response isn’t received in 2 business days, CIBC will dispute the transaction for you. What if the merchant is unwilling or unable to resolve the issue? Customers can file a Mastercard dispute either online or in the CIBC mobile app.

Do’s & Dont’s

When requesting a credit card chargeback, there are a few best practices that you should follow. This optimizes your chances of successfully getting your money back. Below, we have compiled some ‘Dos’ that are actions you should certainly take and ‘Don’ts’ which are actions you should avoid. 

Do:

• Be comprehensive with evidence-gathering: no matter how small or inconsequential an interaction with a merchant was, ensure that you record it and send it to the credit card provider for review. The more comprehensive the list of evidence you have, the more likely your chargeback will be processed successfully.
  
• Continue paying your credit card bill: waiting for a chargeback to be processed doesn’t exempt you from having to pay your credit card bill in the meantime. Continue paying down your balance to prevent any adverse impacts on your credit score.
  
• Understand your credit card provider’s timeline: card providers may have specific time frames for transaction disputes. Do you see a charge that you do not recognize or is an error? Immediately review your bank’s chargeback policy and timeframe. Next, ensure that all communications with the merchant is done prior to the end of the timeframe. This gives you the best chance of the bank accepting the chargeback request.

Don’t:

• Request the chargeback before contacting the merchant: It is important to first try to resolve the issue with the specific merchant first before contacting the credit card provider for a chargeback. The merchant holds the primary responsibility for the product and payment. As such, the chargeback should only be used as a last resort if communications with the merchant do not lead to a productive outcome. 
  
• Lie: If the credit card provider finds that your story is not adding up at any point or that you have lied about your correspondences with the merchant, the credit card chargeback is liable to be denied immediately.

Final Thoughts

Credit card chargebacks are a great tool if you notice a false or inaccurate charge on your credit card or bank statement. You need to confirm whether it truly is a charge that shouldn’t be there. You do not start a chargeback process blindly.

Honesty is always the best policy when it comes to credit card chargebacks. Chargebacks are not for buyer’s remorse. However, you must escalate a truly incorrect or fraudulent charge. If not, you are giving away your money.