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Modern technologies have elevated our service to a high level, so many people are accustomed to making purchases even without visiting stores. Browsing websites where all products and prices are provided. To purchase a product in an online store, it is enough to pay with a bank card virtually.
When paying for goods online, sometimes there is a situation where it is necessary to cancel the payment or purchase. In such cases, it is recommended to use the chargeback service.
Chargeback – is an action that allows you to contest a money transfer with an attempt to return the money when there is suspicion of an unauthorized transaction.
How chargeback works
Money return works in this way - the cardholder contacts the bank for a forced transaction cancellation. In the payment return process, the cardholder first contacts the seller, informing them of the chargeback procedure request. If the seller agrees to the return of the money, they make a reverse payment, canceling the fees and penalties associated with the chargeback procedure.
The return procedure includes certain actions, usually requiring coordinated work of the buyer with their bank and the seller's bank or the service-providing organization.
There are several stages for the process:
- the consumer contacts their bank, the bank's security service reviews the incident;
- a notification is prepared for the seller's bank with an argumentative evidence base;
- the seller's bank reviews the complaint;
- a decision is made after the investigation and study of the evidence for the return of funds;
- the funds are returned or the return is refused based on the investigation results of both banks.
Refund through chargeback?
Refund through chargeback is possible under certain conditions, which are practically the same in any bank worldwide:
- contact the bank as soon as possible after identifying the problem by reporting an unauthorized transaction;
- exchange information with the bank about transactions, dates, and amounts, as well as personal data of the seller;
- it helps to provide the bank with photos of correspondence, receipts, and other evidence material to initiate the procedure;
- fill out the necessary electronic form under the guidance of a bank consultant;
- the bank initiates an investigation and transfers information to the seller's bank about the chargeback, allowing the seller to provide reasoned information about the situation;
- a final decision on the return or non-return of funds after investigations conducted by both banks;
- if the decision is positive, the consumer receives a refund to their bank accounts.
Disputed transactions and chargeback?
After the above actions, sometimes the buyer questions the issue - if they did not receive the full amount back or are dissatisfied with the refusal to return the amount, then it is possible to dispute the chargeback issue and organize an appeal process.
An appeal is possible if the banks' decision is considered unfair by the buyer, allowing for additional stages of investigation and reviewing the decision.
The chargeback procedure may vary slightly in different banks, but there are main directions:
unauthorized transaction, when the card was used without the owner's knowledge;
a problem with the provided service or purchased goods, if it was damaged or does not correspond to what was stated in the advertisement;
violation of the contract terms, when the bank card owner did not consent to the transaction made.
When can chargeback be applied?
In the process of online purchases and virtual transactions, we do not always adhere to security measures, and situations arise that should be understood as risks associated with financial procedures.
If an unauthorized transaction or money transfer has occurred, you should immediately contact the bank for a chargeback. This is also possible if a substandard product was purchased or a poor-quality service was provided. Also, if the terms of the agreement were not suitable, but the transaction was completed, or the product was not received, or the offered service was refused. A double charge occurred, as well as if the seller refuses to return the money.
Chargeback fraud
There are fraudsters who try to profit from chargeback. Buyers can also commit fraudulent actions for profit, for example, after receiving and paying for a product, they may claim it was substandard and initiate a chargeback procedure to try to get their money back for it. At the same time, they keep the product and additionally get a refund. To avoid being deceived, banks conduct special investigations to determine the possibility of a transaction return. If everything turns out to be honest and the seller organized the entire procedure correctly, it is possible to receive the money.