Learn How to Use Chargeback to Recover Losses Due to COVID Closures

When Dawne Novinger’s gym in Portland, Oregon was ordered to close amid COVID-19 closures in the spring of 2020, he assumed he would not be charged the regular monthly rate. card statement, called the gym to request a refund. Unsurprisingly, given the circumstances, there was no one there. She got no response when calling, emailing, or even taking to social media to request a refund from the gym.

“The gym employees couldn’t help because they said they were suddenly unemployed,” Novinger said. “The owner of the gym franchise was MIA.” Meanwhile, another monthly charge came to his card. As a last resort, Novinger filed a successful chargeback claim with your credit card issuer. A chargeback allows you to dispute a charge on your card and can help you claim a loss. But here’s what you need to know about looking for one, especially during a pandemic: How a chargeback could help amid COVID A chargeback isn’t just about tackling a fraudulent purchase. Thanks to the Federal Fair Credit Billing Act, cardholders have the right to dispute charges for goods and services that they did not accept or that were not delivered as agreed. And over the past year, when air travel came to a halt, supply shortages soared, and businesses collapsed under economic pressures, many cardholders have apparently been dissatisfied with certain products. “Chargebacks increased 25% as a result of COVID-19,” according to industry expert Monica Eaton-Cardone, founder of Chargebacks911, a company that helps merchants handle chargebacks. If you are considering filing a chargeback on your credit card, there is a limited period of time in which a claim can be considered. For major credit card payment networks such as Visa, V, -0.08% Mastercard MA, -0.60% and American Express, AXP, -1.13%, that window is generally 120 days. But that doesn’t necessarily mean 120 days from when the charge appears on your credit card. The window is 120 days from the date of the expected services. “As long as you pay for something, you have the right to file a chargeback from the date the product or service is due to be delivered,” says Eaton-Cardone. “That means if you bought a trip in 2020 for a trip in 2021, you can still charge a charge based on the date the trip was supposed to take place.” Even in cases where a travel company may offer a coupon or credit in lieu of a full refund, you can still dispute the charge. If, for example, an airline canceled your flight or significantly changed your itinerary and is unwilling to give you a full refund, this is contrary to the company’s obligations as detailed by the Department of Transportation. However, a chargeback is not always the best, easiest, or fastest solution. For one thing, while chargebacks may have skyrocketed during the pandemic, the “manpower of card issuers to deal with the onslaught of increased dispute volume has not increased,” says Michael B. Cohen, co-founder of MyChargeBack, a company that helps consumers with complex credit card disputes. According to Cohen, that means he may be dealing with adding “human frailty to a system that may already be complex for the cardholder to navigate.” In other words, don’t expect immediate satisfaction from filing a chargeback, particularly as the COVID-19 crisis continues. See Also: 7 Things You Really Shouldn’t Buy With That $ 1,400 Stimulus Check And, of course, you can’t just have your airline’s peanuts and eat them too. “You can’t accept a credit and then file a chargeback,” says Eaton-Cardone. “Not only will you lose the chargeback dispute, you could also lose the coupon that was issued.” 3 Things to Do When Considering a Chargeback While many credit card issuers have made filing a chargeback relatively easy with just a few clicks, that doesn’t mean the process itself is always cut and dry. Here are three things to do first: 1. First, try in good faith to reach an agreement with the merchant. The Fair Credit Billing Act explicitly requires that you contact the merchant first to give them an opportunity to resolve the charge. And in fact, that’s the best for you and the merchant. You are likely to get the money back in your pocket more quickly from the merchant than from a chargeback investigation, and the merchant can avoid the cost of such a process, which can be especially damaging for small businesses already suffering from COVID-19. . “For every $ 1 charged by the consumer, it costs the business $ 3,” says Eaton-Cardone. It‘s also worth noting that travel companies have instituted more consumer-friendly policies as a result of COVID-19. Many major airlines have implemented exchange fee waivers, and once rigid travel rules have generally become looser. There may be a solution waiting for you when you call. Also on MarketWatch: ‘digital nomads’ descend on Croatia which is already a hotspot for European tourism AND if you are not getting anywhere with the representative you are dealing with, ask if you can escalate the issue to the manager. Keep good records When you are trying in good faith to obtain a refund directly from the company, keep a record of everything you are doing. If you can’t resolve the dispute directly, that “evidence” will help your chargeback case run smoothly. If you choose to go ahead with a chargeback, you can show that you tried to reach the merchant by phone, email, or even social media. Save all correspondence and make notes of your attempts over the phone, noting who you spoke to on what day and at what time. If the case becomes a “he said, she said” situation, you will have the documentation you need to support your claim. Know Your Rights and the Rules Cohen knows how challenging the nuances of a consumer chargeback can be. “Each bank has a different process,” he says. “Sometimes when people with good intentions try to fill out the form themselves, they often contradict themselves without realizing it. They call it fraud and then they say the charge was authorized. The language used is very important, and a claim can be rejected for contradictions that the client did not realize they were making. “An unauthorized charge, also known as fraud, is very different from an authorized charge that you want to dispute. : Credit reporting errors are a big consumer complaint – how to fix them A little research can help you better understand the process. Cohen recommends visiting the branch of the credit card issuing bank in person, if possible, to talk to someone about the chargeback process face-to-face. “Try to get help ‘from within’ to try to reduce human error,” he advises. “Know when to follow up, how to follow up, so that your case don’t slip through the cracks. “More from NerdWallet Erin Hurd writes for NerdWallet. Email: ehurd@nerdwallet.com.