Last editedJan 20222 min read
Before looking at the issue of credit card chargeback time limits, we’re going to explain what a chargeback is. In simple terms, it’s a mechanism that enables consumers to receive a refund on payments for goods or services in circumstances in which a merchant refuses to give them their money back.
How to make use of chargeback
If a consumer has made a payment using a credit, debit or charge card, it’s possible for the bank to put the transaction into reverse. Merchants need to be aware of this facility as it informs the manner in which they deal with requests for refunds. This is particularly true since the chargeback mechanism is something built into the rules set out by Visa, Mastercard and American Express.
When can chargeback be used?
To make use of chargeback, consider the chargeback time limit. UK consumers and retailers should be aware that there are two main requirements. The first is that a breach of contract needs to have occurred. In layman’s terms, this means the consumer didn’t get whatever it was they paid for. The second requirement is that the consumer must have tried to get their money refunded by the merchant. Only if this fails can chargeback be used, under the following circumstances:
the business from which the purchase was made has gone into administration
the goods which were purchased were not as described by the merchant, or were defective
although they have been paid for, the goods in question haven’t been received as promised
if a technical issue has caused a problem, such as a processing error by the bank or authorisation having expired
a clerical error which means that the consumer has been charged the wrong amount for the item, or had the payment taken from their account multiple times
if the transaction took place as the result of fraudulent activity and was not, in fact, authorised by the consumer
Time limit for chargeback
When deciding if chargeback is the right approach for a purchase, consider how long ago it was made. The Visa chargeback time limit, also used by other card providers, means it has to be used within 120 days of purchase. An exception to this, confirmed by Visa and Mastercard, is when the payment is for a future-dated item, such as a flight or concert tickets. In cases like this, the 120-day limit is counted from the day the service was due to be delivered – so, when the concert is held or the flight occurs.
In general, it doesn’t matter what the amount spent on the card was – as long as the criteria for a chargeback are met, the payment will be covered. The slight exception to this is the £10 minimum spend applied by Mastercard. This doesn’t apply to purchases made using Visa or American Express payment cards.
The chargeback process
Once a consumer has exhausted efforts to gain a refund from a merchant or business, they simply have to contact the card provider and ask to make a claim through the chargeback scheme. They need to provide details of the transaction in question, including copies of correspondence with the merchant.
We can help
If you’re interested in finding out more about the chargeback system, get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.