Chargeback claims: how to get your money back

Depending on whether you’ve got an Amex, MasterCard Chargeback card, or a Visa Chargeback, rules differ slightly across the UK. That’s because Chargeback is a voluntary scheme, rather than legally required. But in many cases, it means you can get your money back from your bank. 

Many people don’t know about the Chargeback scheme. But its use increased during the coronavirus (COVID-19) pandemic, with so many flights, holidays and events being cancelled.

What is the Chargeback scheme?

It’s a scheme offered by debit, prepaid or credit card providers. It means you can get a refund if something goes wrong when you use your card.

You can get your money back through:

• Your bank or building society (if you’re part of a Chargeback debit card scheme);

• Your credit card provider; or

• Your prepaid card provider.

The way it works is that your card provider reverses the transaction you’ve made. Instead of going to the supplier or retailer, they go to the supplier or retailer’s bank. That’s why the money can still sometimes be recovered even if the supplier has gone bust. 

But you’re not guaranteed to get your money back. Chargeback isn’t a legal protection – it’s a voluntary scheme.

When can I use Chargeback?

There are a number of circumstances when you may be able to use Chargeback to recover the money you have spent. You can use Chargeback to get your money back if:

• A purchase doesn’t arrive

• A service you’ve paid for isn’t provided

• Something you’ve bought is faulty

• The company you buy from goes bust and you can’t get money back from them

• The goods or services you’ve paid for aren’t as described or are in an unsatisfactory condition

• You’re charged more than agreed for a purchase, or are charged more than once

• Your card is used fraudulently.

You have to go back to the retailer first to try to get back the money you’ve paid. You can only use Chargeback if the retailer refuses to give you a refund or can’t help (for example, if they have ceased trading).

How much money can you get back?

Most of the time you’ll be covered regardless of how much you’ve spent on the transaction. You can claim back the full amount you’ve lost. For example:

• If you order a phone worth £250 and it doesn’t show up, you could claim £250

• If you were charged £450 for a £250 phone, you could claim £200 back.

The rules do differ slightly depending on which Chargeback debit card or credit card you have.

Visa Chargeback rules mean there are no limits to the size of the claim you can make. It’s the same for an American Express card.

But, if you’re part of the MasterCard Chargeback scheme, there’s a minimum claim amount of £10. Purchases under £10 aren’t covered.

Is Chargeback the same as Section 75?

No. The Chargeback scheme plugs the gaps in Section 75's protection by offering:

• Protection for debit card and prepaid card transactions; and

• Protection for credit card transactions of any value.

Section 75 only works if your purchase costs £100 to £30,000 and is made on a credit card.

Unlike Section 75, the Chargeback scheme isn’t enforced by law. It’s a voluntary agreement between credit card providers and card issuers, who set the scheme rules. This includes Visa, MasterCard and American Express.

The following card types all offer Chargeback protection:

What’s Section 75?

When you use a credit card to pay for goods or services worth between £100 and £30,000, you are protected by Section 75 of the Consumer Credit Act. That means you could get your money back if something’s wrong and the company goes under, or if you don’t receive what you have paid for.

Section 75 doesn’t apply when you use your debit card. It also doesn’t apply if you buy something for less than £100, or over £30,000, on your credit card.

What are the main differences between Chargeback and Section 75?

There are a few big differences between Chargeback and Section 75. These include:

• Section 75 provides legal protection, whereas Chargeback is a voluntary scheme.

• Chargeback can be used for credit and debit card purchases, whereas Section 75 only applies to credit card purchases.

• With Section 75, you can claim for goods a long time after you receive them - you can claim at any time. Chargeback is focused more on goods not arriving or goods being faulty when you receive them. You usually have to make the claim within 120 days.

• With Chargeback, you can claim for any amount. The only anomaly to that rule is that if you have a MasterCard, there’s a minimum £10 claim. But with Section 75 the claim must be between £100 and £30,000.

• Chargeback only lets you claim back the amount you put on your card. Section 75 lets you claim the whole transaction value.

Can you use Chargeback for purchases of any size?

Yes, you can use the Chargeback scheme regardless of how much you’ve spent on your credit card. However, if you’ve spent £100 to £30,000 on a credit card, you can use Section 75 protection to get a refund.

Section 75 usually gives you a much better chance of getting your money back because it’s legally binding. In comparison, Chargeback is just an agreement between card providers and issuers.

The good thing about Chargeback is that you’re covered for lower value purchases of under £100. So it’s good for small things you might buy, such as clothes. But, if the value is over £100 and less than £30,000, you’re better off using Section 75 to recover your money. 

Are there any transactions not covered by Chargeback?

You can only use the scheme if you paid on your card. If you withdrew cash and used that to pay for something, you’re not covered.

You can’t typically claim if too much time has passed or you bought through some third parties like PayPal, although there may be some exceptions.

How quickly do I need to make a Chargeback claim?

To make a Chargeback claim you’ll need to contact your card provider within their time limit. It’s usually 120 days. But this depends on the situation and the card provider.

The date from which the time period begins can vary according to the situation:

• If you made the purchase in person, the time period usually starts from the date of the transaction.

• With online purchases, the time period usually begins on the delivery date of your order. If the order doesn’t arrive, it starts on the missed delivery date.

• If you bought a service that will be used in the future, like flights or concert tickets, the time limit starts from the date of the planned event. But you do need to claim within 540 days of when you paid.

Using PayPal

The Chargeback scheme doesn’t usually apply when you use PayPal. That’s because your card transaction is with PayPal rather than the seller.

If you use PayPal and don’t receive your goods or services as promised, you can claim by opening a dispute through PayPal.

If this doesn’t work you may be able to make a claim through the Chargeback scheme. However, as there’s no legal obligation to return your money, the outcome is up to your card provider.

Ideally, you need to make it as easy as possible for your card provider to match your transaction with your purchase. The best way to do this is by paying directly, using your card.

PayPal's guide to its dispute resolution service.

How to make a Chargeback claim

First you need to try to resolve the issue with the retailer. It’s only after that you can complete a Chargeback request. Contact them by phone, post, email or in person to try to get your money back.

If the retailer refuses to give you a refund, you can start a Chargeback claim. Here’s how:

• Contact your provider (by phone or by visiting a branch) and tell them that you want to make a claim through the Chargeback scheme

• Give full details of the transaction you want refunded

• If they ask for it, provide them with copies of any correspondence you had when you tried to get your money back from the seller. This might include letters, emails or records of phone calls.

Some banks ask you to fill out a claim form. Others just take details of the transaction and start the claim for you.

Does your bank know what Chargeback is?

Chargeback isn’t a well known scheme, so there’s a chance that the person you speak to at your bank may be unaware of the scheme. It’s not as well-known as Section 75 protection.

If you find that’s the case, ask to speak with a supervisor or suggest they check with a manager. They should be able to get details of the Chargeback scheme procedure.

How long does it take to get your money back?

When you raise a Chargeback request, your bank will hopefully tell you how long it’s going to take. It varies depending on which bank you use and how straightforward your claim is. 

They don’t have to stick to a specific time frame. But if it takes longer than eight weeks, get in touch with your card provider again. You may even choose to make a complaint or take the issue to the Financial Ombudsman at this point.

Some banks re-credit your account straight away, but reserve the right to take the money back if your claim is unsuccessful. So be careful not to spend it before the Chargeback claim is complete. If the company you’ve bought something from disputes your claim, that’s when it could be taken back.

With American Express, they have 20 days to dispute your claim. With Visa and MasterCard Chargeback, they have 45 days to dispute it. After that, you can feel more confident about spending your money.

Other banks investigate the claim before crediting your account.

What if your claim is rejected?

If your Chargeback request is rejected, you’ve got a right to know why.

If you think their decision is unfair you can complain to the bank. If they still refuse your claim, you’ve got six months to take your case to the Financial Ombudsman. The bank’s decision might then be overturned.

You can’t take your bank or card provider to court over the decision. That’s because the Chargeback scheme isn’t a legal requirement. It’s voluntary.