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How Long Can You File a Chargeback?

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Last editedJul 20222 min read

Chargebacks are a common problem for all different types of company. While they are an essential form of protection for consumers when they make online purchases with a credit card or debit card, they can too often cause issues for the merchant due to complicated rules that differ from one network to another, as well as the possibility of fraud.

Chargebacks are in fact relatively rare, so you won’t have to deal with them too often. But it’s good to be informed on how they work and how you should handle them as a merchant. Many business owners ask themselves ‘how long do you have to file a chargeback’? Keep reading to find out the answer to this question and more.

What is a chargeback?

Before answering the question “how long can you file a chargeback?”, it’s useful to first understand exactly what a chargeback is. Chargebacks allow customers to dispute their payments when they are unhappy with a purchase for whatever reason, or if they believe that they have been incorrectly charged. You may also hear this referred to as a ‘reversal’ or a ‘claim’.

Chargebacks can occur for a variety of reasons, but it’s often related to what customers believe to be a fraudulent purchase. These reasons include:

  • Fraud, i.e., when a purchase has been made without the buyer’s knowledge or consent.

  • When a customer has paid for a product or service but hasn’t actually received this.

  • Administrative or technical mistakes that cause a customer to be charged twice for one purchase, resulting in a chargeback for one of these payments. This could be caused on your end, or due to a bank error.

When asking how far back can you do a chargeback, it’s also important to remember the situations in which chargebacks are invalid. Customers cannot claim a chargeback if they have buyer’s remorse, or if they failed to return the item before the return date.

What is a chargeback period?

To answer “how long do you have to claim a chargeback?”, you should know about chargeback periods. This is the time frame within which credit card holders can dispute transactions.

The length of the chargeback period will vary depending on the payment processor, but tend to be around 120 days from the initial purchase – both Visa and Mastercard have a chargeback period of 120 days. If the chargeback is claimed within this period, then it is valid.

The chargeback period is an essential protection for merchants, since they will lose money from having to process the chargeback in the form of penalty fees that are paid to card issues.

What’s the problem with chargebacks?

Since they’re an essential form of protection for consumers, why do chargebacks cause such issues for merchants? Well, if you’re asking “how far back can you do a chargeback?”, you may already be familiar with these problems.

One of the biggest issues with chargebacks is that customers will request these without exploring other options first. If they believe there has been an error or instance of fraud, they will often instantly request a chargeback rather than speaking directly to the merchant. This means that the merchant is obliged to pay chargeback fees that could have been avoided.

In addition, many chargebacks are in fact fraudulent themselves, and knowing about this is an important way to protect your business from fraud. For example, customers may claim a refund on an item that they claim not to have received, when they actually did. This is a process commonly known as ‘online shoplifting’.

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GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.

Over 70,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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