Chargeback explained: what it is, what it covers, and how to ask for one

Chargeback is the process by which your card provider reverses a payment and recovers the money from the retailer's bank. It is not a law. It is a rule of the card schemes, which every bank issuing their cards agrees to follow.

That distinction matters more than it sounds. Because chargeback is contractual rather than statutory, the scheme rules decide what is covered, what evidence is needed and how long you have. Those rules are detailed, they change, and front-line bank staff do not always know them well.

What chargeback covers

• Goods or services paid for and never received
• Goods materially not as described, or defective on arrival
• A transaction you did not authorise
• A payment taken twice, or for the wrong amount
• A recurring payment taken after you cancelled
• A retailer that ceased trading before delivering
• Currency converted without your agreement or without disclosure

Two advantages over Section 75

It works on debit cards. Section 75 is credit card only. Most people spend on debit, so for most purchases chargeback is the only card protection available.

There is no minimum value. Section 75 needs a cash price over $100. Chargeback will handle a $12 dispute if you want it to.

Two disadvantages

The time limit is short. Generally 120 days. Section 75 runs for years.

It is not a legal right. If your bank declines a chargeback you cannot sue it for refusing, though you can complain, and the Financial Ombudsman will look at whether the bank applied the scheme rules properly.

The 120 days: what the clock runs from

This is the most misunderstood point in consumer money claims, and it costs people real money every week.

The 120 days does not automatically run from the date you paid. It runs from the date you knew, or reasonably should have known, that there was a problem. In practice that usually means:

• Goods not received. from the promised delivery date. If no date was given, the Consumer Rights Act implies 30 days.
• Services not provided. from the date the work was due to be carried out.
• Events and travel. from the event date or the intended travel date.
• Subscriptions. from each individual payment.

So a deposit paid in January for a kitchen booked for August has a window that opens in August, not one that closed in May. We have rescued a great many claims that the customer, and occasionally the bank, had written off as out of time.

How to ask for one

Do it in writing. Telephone requests get logged loosely, often without a reason code, and you have no record of what you asked for.

Include the last four digits of the card, the transaction date and amount, the merchant name as it appears on your statement, what went wrong, what you have done to resolve it directly, and what you want. Attach your evidence.

Then say explicitly: "Please raise this as a chargeback. If you decline, please treat this letter as a formal complaint and issue a final response." That single sentence starts the eight-week complaint clock and preserves your route to the Ombudsman.

Our free letter template does this for you.

What happens next

Your bank submits the chargeback under a reason code. The retailer's bank can accept or defend it, that defence is called representment. If they defend, you get an opportunity to respond. Unresolved disputes can go to scheme arbitration, though very few do.

Expect six to ten weeks for a straightforward claim. If your bank has not updated you within eight weeks, that is a complaint in itself.

Do you need help with this?

Usually not. A single, well-documented chargeback with clear evidence is something most people can raise themselves, free, and we would rather you did. Use the template, keep a copy, and diarise the eight-week point.

Where help is worth paying for: the claim has already been refused, several routes overlap, the sum is large enough that the fee is worth it to have someone else deal with it, or the process is more than you can face right now. Those are all legitimate. Not knowing where to start is not the same as needing to pay someone.