Chargeback
Chargeback is a card-scheme rule (Visa, Mastercard, Amex) that lets a cardholder dispute a transaction and ask their card provider to reverse it. It applies to debit and credit cards. Time limits and grounds vary by scheme and circumstance.
You pay £80 for an item with your debit card. It never arrives, and the retailer will not refund. You ask your card provider to raise a chargeback within the scheme's time limit, and the funds are returned while the dispute is resolved.
- Chargeback is not a legal right. It is a card scheme courtesy. Section 75 is the legal right, but it only applies to credit cards on purchases over £100.
- Chargeback time limits are typically 120 days from the transaction date, though they vary. Apply early.
- Chargeback can be used for debit card payments. Section 75 cannot. For debit card disputes, chargeback is usually the only route.
Why it matters
Chargeback fills the gap that Section 75 leaves. Section 75 only applies to credit cards on qualifying purchases over £100. Chargeback works on debit, credit and prepaid cards and on transactions of any value.
The scheme rules cover situations like:
- Goods or services not delivered
- Goods or services not as described
- Duplicate or incorrect charges
- Fraudulent transactions
- Cancelled subscriptions that continue to charge
If your card provider raises a chargeback, the funds are temporarily returned to you while the retailer’s bank investigates. The retailer can dispute the chargeback. If the dispute is upheld, the funds are returned to the retailer; if not, they stay with you.
Common confusion
The biggest source of confusion is between chargeback and Section 75:
- Chargeback is a card scheme rule. It applies broadly, has short time limits and is not a legal right.
- Section 75 is a statutory right under the Consumer Credit Act. It applies only to credit cards on purchases over £100 and is stronger when it applies.
For a £50 item bought on a debit card that never arrives, chargeback is your route. For a £500 item bought on a credit card that never arrives, Section 75 is usually the stronger route, though chargeback may still be raised. Banks sometimes start with chargeback because it is quicker.
People also assume their bank will always grant chargeback. They will not. The bank reviews the evidence. If the retailer can show delivery, signed receipt or service rendered, the chargeback may be reversed.