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If your credit card was charged for an order that never arrived, or you’re still paying for a subscription you canceled, you have two options for getting your money back: A refund or a chargeback. The two terms are often used interchangeably, but there’s one huge difference between them: Refunds are authorized by the vendor or merchant, and they’re permanent; chargebacks are authorized by credit card companies, and they can be temporary.
How credit card chargebacks work
Getting a full refund from the seller is always better than filing a chargeback, but sometimes you have no other choice. The most straightforward chargeback scenario goes something like this: Someone who works at the institution that issued your card (your bank or credit union, for example) reviews your dispute and any supporting documents you submitted, like receipts and copies of contact with the vendor. They decide it’s legit and pass it on to someone at the credit card company (like Visa, MasterCard, or American Express) for further review. The chargeback reviewer at Visa agrees, and they tell the card issuer to pay up. You get your money back, and all is well.
Visa may not side with you immediately, though, which is where the temporary nature of chargeback credits comes into play. They may let the merchant dispute your chargeback and, as a courtesy, advise your bank to put a credit on your account while waiting for the merchant to respond. Depending on the specific credit card company in question—and the responsiveness of the merchant and whatever financial institutions they’re involved with—completing their investigation could take anywhere from 60-90 days. (Most credit card companies give merchants 30 days to respond to each request for additional information.) If Visa ultimately sides with the merchant, they’ll take the courtesy credit back, and you’ll be out the cost of the disputed purchase.
From a consumer perspective, the good news here is that credit cards usually end up siding with the cardholder. Reviewing chargebacks is a lot of work, and it’s not easily automated; credit card companies have more resources to devote to paying staff than most merchants, which puts them—and therefore you—at an advantage. Smaller sellers may not even respond to chargebacks at all.
With that said, you can’t expect a swift, favorable resolution. Some merchants will fight chargebacks all the way, even when they’re clearly in the wrong. The best strategy for turning a temporary chargeback credit into a permanent one is to be right: Understand the policies that apply to the disputed purchase and submit as much evidence as you can. You should get your money back—even if it takes a couple months.