A credit card transaction can sometimes not go as planned because of a cancelled order, a billing error, non-delivery of a product or service, or an unauthorised payment. In all such cases, credit cardholders may seek a refund or file a chargeback. Now, it is important to note that both can help recover money; still, they differ fundamentally in who initiates the process and how the dispute is resolved. Let us discuss both concepts in detail, along with the fundamental differences between them, so that credit card users can address such issues appropriately. Note: The differences discussed above are illustrative in nature and are not exhaustive. When a purchase is cancelled, a product arrives damaged, or a service is not delivered as agreed, an individual credit card holder can request a refund. This refund can be requested directly from the merchant. You can also approach the merchant if you notice a duplicate charge, another discrepancy, or an incorrect amount, provided the business is accessible. In such cases, it is prudent to keep order details, receipts and written correspondence in proper order with the merchant. It is also wise to check the applicable refund policy and allow the stated processing time before escalating the matter further. If the merchant completely refuses a valid refund request, fails to respond within a reasonable time, or does not deliver the product or service, you can contact your credit card issuer to dispute the transaction. You should also ensure that any unauthorised transaction or debit on your credit card is promptly reported to your bank and the relevant authorities. Make sure you also submit supporting documentation, such as transaction details, receipts and correspondence. The dispute deadline varies depending on the terms and conditions. Hence, contact your credit card issuer without delay. A chargeback is not guaranteed; the merchant can also challenge the claim with evidence. A clear understanding of the difference between a credit card refund and a chargeback is crucial. A credit card user should first seek a merchant refund for routine purchase-related issues. If the matter remains unresolved or involves suspected fraud, it is prudent to contact your lending or credit card-issuing institution to explore a chargeback and seek an amicable solution. Disclaimer: This article is for general information and awareness only. Readers should contact their credit card issuer for guidance on refunds, chargebacks and transaction disputes. Shivam writes on personal finance, equity markets, and mutual funds. He has previously contributed to several leading publications, including Moneycontrol. He can be reached at shivam. shukla@htdigital. in
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