A chargeback dispute is the reversal of a purchase made through a credit card transaction due to an error or fraud. For a merchant, chargebacks can be a crippling danger to the survival of a business. However, for a consumer, the process can be long and stressful, especially when the funds are needed back into the account and as quickly as possible.

Chargebacks may seem somewhat similar to conventional refunds, but there is one very significant difference. Instead of calling the merchant directly to request a refund, the consumer or cardholder asks the issuer bank to take money from the account of the merchant. The process is not that easy, though. The consumer must provide reasons and proof that a chargeback is legitimate and valid.

Reasons to Request a Chargeback

There are three main reasons for filing a chargeback: criminal fraud, friendly fraud, and merchant error. Directly submitting a request for a chargeback results in a chargeback dispute between the consumer and the merchant. 

When it comes to criminal fraud, it seems relatively black and white to determine who the guilty party is. The dispute results typically in further investigation of a third party that is not known to either the merchant or the cardholder. The transaction often reveals a criminal offense by an external entity.

The second is called friendly fraud, which could be the consumer’s mistake in filing the chargeback process. The cardholder is often the one guilty of error in this situation. This gives a great advantage for the merchant to fight back, nullify the order, and keep the money.

There are two ways of committing friendly fraud. One could be accidental and the other intentional. Unknowingly, cardholders sometimes commit an accidental chargeback fraud.

The third reason is called the merchant error. This may not be altogether valid or invalid. If cardholders file chargebacks because they are just dissatisfied with a transaction, they believe a legitimate chargeback dispute process is being presented. 

In most merchant error cases, there was no fraud committed by either the consumer or the merchant. It could only be by reason that the merchant made a mistake in the transaction, or the consumer claims that the merchant made such a mistake.

How to Win a Chargeback Dispute as a Consumer

The process of a chargeback is not easy. It takes time, and it can be costly. Chargebacks inevitably lead to more than just the loss of sales for merchants. Each purchase that turns into a chargeback also involves loss of shipping costs, merchandise, processing fees, and all the fees added to the transaction.

You need to understand the process to win a chargeback dispute as a consumer. From the very beginning of the transaction, you must have kept accurate records. Consult the card issuer for more details on acceptable reasons and compelling evidence. Also, you must have saved all the documents you might need for filing.

If you have to write a formal complaint, do so quickly. Every dispute must be accompanied by a rebuttal letter of chargeback. Learn the dispute process and follow the steps rapidly as the chargeback time limits for cardholders are quite long.

Finally, confidence is a significant factor. If you have taken the necessary steps with confidence, you can point out merchant error, reduce friendly fraud, or determine criminal fraud successfully.

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