Credit Card Chargeback Time Limit

A chargeback expends time and stress for just about everyone involved. It is especially burdensome for a credit card merchant, who loses a lot of resources due to a successfully issued chargeback case. A credit card customer has a time limit for initiating a chargeback claim per most bank policies.

A credit card chargeback is a dispute related to a credit card charge. In short, the customer is dissatisfied in some way with the merchant’s charge to his card and chooses to seek recourse directly from his credit card company. In some cases the chargeback is a result of fraudulent activity on the credit card account. When a dispute is issued and the credit card company requests a chargeback on behalf of the customer, the merchant stands to lose the sale and chargeback fees that can exceed $20 per instance. Chargebacks are common for instances where the customer is not physically present when using his card, such as online sales.

A customer commonly has up to 180 days or six months to open a dispute to receive a chargeback. The exact limit may vary depending on the bank. After the time limit is up, he must accept the charge permanently or seek other methods of getting his money back, such as appealing directly to the merchant for a refund or by pursuing a small claims case.

As a customer, it is important to attempt to receive a refund directly from the merchant first. “Did you contact the merchant?” is one of the first questions the credit card company asks when you open a dispute to receive a chargeback. Also, it is against bank policies to habitually accept products and services and then seek a chargeback as a way to get the item for free. This is called “friendly fraud” and could cause problems with the card account.

Since as a merchant you know that customers have up to 180 days to submit for a chargeback, you should keep all records of the transaction on file for at least that time. Keep all evidence you have of the sale, including signed receipts (if available), proof of delivery in the case of an online sale, and written communications from the customer. It is often difficult to fight chargebacks, but many vendors simply consider it a cost of doing business and enact preventative measures (such as refusing to accept international orders or requiring a card verification code) to minimize the occurrence of chargebacks. Some services also offer merchants searchable databases of individuals who have a history of excessive chargebacks.