Types of Credit Card Chargebacks & Why They Matter for Your Money

by Kevin Sun

When used properly, credit card chargebacks are a powerful tool for protecting your money and credit. However, before starting a dispute with your credit card company, it’s important to understand what actually counts as a disputable charge. For example, if you bought something that’s exactly what a store said it would be, but you just don’t like it and can’t return it due to the store’s policy, then that’s not a valid reason to file a dispute. If your dispute is clearly invalid and you still try to push it through, then not only will your credit card company reject it, but they could also become more critical of any future disputes you file – even if those are legitimate.

With that important caution in mind, here are the 3 types of chargebacks you should ask for:

Billing Errors

Billing errors are generally the easiest problem to report. After all, it’s not hard to show that the price you paid for something has an extra zero at the end or that you were double charged. Before reporting anything, however, make sure it’s actually an error and not just something you overlooked. Ask yourself these questions:

• Did I forget to think about the added taxes?
• If I made the purchase using a different country’s currency, did I add both the exchange rate and the foreign transaction fee (if applicable, it’s usually around 1-3% of total cost)?
• If it’s a food service, did I add my tip, or did the service automatically charge an extra tip?
• Does the merchant charge any extra fees that I might have overlooked?
• Is the charge really for what I think it is?

Once upon a time, I got what I thought was a double charge on my Amazon Prime subscription. However, after some digging and a phone call with Amazon, I realized that I had mistakenly subscribed to Prime in both Canada and the US. Catching this before involving my bank no doubt saved me a lot of time and helped keep me in my bank’s good graces.

Fraudulent Charges

No matter how careful we are with our accounts and passwords, there’s always the risk of a criminal stealing our credit card information to make illicit purchases. If this happens to you, then so long as you catch it fast, you probably won’t be on the hook for the purchase. Immediately contact your credit card company to report the stolen card and have it deactivated. Even if you still have your physical card, losing its online payment details is the same as having it stolen. You should also change all of your pin codes and passwords — even the ones that have nothing to do with your credit card — and pull your latest credit report to check for any suspicious activity.

Keep in mind that if someone you know uses your credit card without your permission, then disputing that charge means you’re accusing that person of making a fraudulent charge. Only do this if you’re ready to file a police report against that individual.

How to Help Friends or Family Save Money (Without Giving Them Any)

Not Getting What You Paid For

While you can’t dispute a credit card charge just because you don’t like what you bought, a dispute can be an option when what you bought isn’t what the merchant promised. This can be difficult to prove and will require you to get as much evidence as possible to back your argument.

Before going to your credit card company, contact your merchant; they are often happy to settle problems with customers directly. While it’s normal to be frustrated about having to do this, staying polite and sticking to the facts will raise your chances of success. For example, if you bought something online and didn’t get what was advertised, then point out the differences between what the store page promised and what you actually got. You may need to illustrate this with pictures or even a short video. Make sure to keep records of all communication. If you bought from a marketplace like Amazon or eBay, then you can also contact the company that owns the marketplace to report the problem. If you do in the end decide to file a dispute, then you’ll likely have to show your credit card company proof that you tried talking to the merchant first.

Catch Incorrect Credit Card Charges and File Disputes More Easily by Tracking Your Expenses

Even if you know what you can start a chargeback on, you still need to find them when they do happen. Small billing errors or even fraudulent charges can be hard to catch and may add up to a costly expense over time. If you’re worried about this happening, then keep a close eye on your money with an expense tracker. After recording your expenses, you can compare what you tracked with your credit card statements to check for any mismatch. This will not only help you catch incorrect charges, but will also help you stay on top of your spending!