F. Chargeback protection

F. Chargeback protection

Chargeback protection is a mechanism whereby a cardholder may ask the card-issuing bank to help in applying for refund if there is a dispute over the transaction between the cardholder and the merchant. A typical example of chargeback is a cardholder purchases goods online with the credit card and the goods delivered are defective. In this case, the cardholder may apply for a chargeback and request a refund.

Chargeback protection is provided by the credit card associations and subject to the rules of the respective credit card associations. Accordingly, a cardholder will have to follow the pre-set procedures and timelines in raising a chargeback request. 

The chargeback process is generally as follows: 

1. The cardholder contacts the card-issuing bank to initiate a chargeback request. 
2. The card-issuing bank raises the dispute on behalf of the cardholder with the merchant’s bank through the credit card association. The merchant’s bank or the merchant may accept or reject the chargeback request in accordance with the rules of the credit card association. The cardholder may be asked to provide detailed information about the relevant transaction, including the transaction receipt.
3. If the chargeback request is accepted, the transaction payment will be refunded to the cardholder through the card-issuing bank. If the chargeback request is rejected, the cardholder may submit the disputed transaction through the card-issuing bank to the credit card association for arbitration in accordance with the rules of the credit card association.