IF you own a credit card, there’s a good chance you’ve been using it for years without ever having heard the term “chargeback”, much less understood how it could work for you.
Chargeback is a wonderful consumer protection, offered by banks and their credit card company partners, which sees those who have paid for goods or services with their credit cards being refunded if they don’t get what they paid for.
You can also apply for chargeback in the case of billing errors, duplicate charges or fraudulent transactions. Essentially, your payment is reversed if your application is successful.
So, for example, if you make an internet purchase with your credit card and the item doesn’t arrive, or is not what you ordered or is defective, and the seller won’t refund you, you can apply to your bank for chargeback. The same applies to any purchase made with your credit card.
But there’s relatively little consumer awareness of chargeback in this country, so many consumers have suffered a loss when they could have applied to the bank that issued their credit card for chargeback.
Early last month, when it became clear that budget airline Velvet Sky was in trouble, I began advising Consumer Watch readers about chargeback and exactly how to go about applying for it, having sourced specific information from each of the four major banks.
I’m happy to report that I have received e-mails from several readers who followed that advice and have since been refunded.
“Thanks to your article on March 5 on chargebacks, I approached Nedbank for a refund, which has now been reversed into my account for the unused Velvet Sky tickets,” wrote Mike Caminsky.
“I applied for a refund from Velvet Sky first, but am still awaiting a response or acknowledgement from them. The last time I called them I was told that their bank account had been frozen!”
Veenay Bennideen applied for chargeback at First National Bank, having had no response from the airline to his request for a refund.
“The chargeback was successful and I got all my money back,” he reported last week. “Thank you sincerely for your advice and support in this matter. I would never have known about this option were it not for your advice.”
Parlan Moodley was thrilled with Nedbank’s response to his chargeback request: “The card division initially told me that it would take up to 45 days. I filled in the forms and faxed them off on Friday and on Monday they informed me that my account had been credited.
“I wasn’t aware of the chargeback facility until I e-mailed you,” Moodley said. “Banks should advise all clients applying for a credit card of this.”
Prominent disclosure – and the consumer awareness which results – is essential if the chargeback remedy is to be meaningful.
So Consumer Watch is doing its bit, again, to raise awareness about chargeback.
Here’s how to go about requesting chargeback from the various banks – you will be asked to provide substantial supporting documentation.
A cardholder has 120 days from the date of non-delivery of a service to request chargeback via Absa.
Cardholders need to first attempt recovery from the supplier, failing which they are entitled to initiate a chargeback dispute.
From there, a formal process is followed between the issuing bank and the merchant’s acquiring bank (the bank that processes card transactions on behalf of the supplier) to determine the validity of such dispute.
Should the dispute be found to be justified, the supplier of the service is debited and the cardholder’s account is credited.
To claim chargeback via Absa, call 0861 462 273, visit a branch, or e-mail [email protected] absa.co.za
Nedbank clients – holders of Visa, Mastercard or American Express cards – have just 30 days from the date on non-delivery to raise a chargeback claim.
“This allows enough time for Nedbank to validate the chargeback before we finally submit it to the acquirer,” says Pamela White, the bank’s head of corporate card services.
To claim chargeback from Nedbank, call the bank’s call centre at 0860 555 111.
A dispute form will be provided, and you’ll be asked to provide the standard documentation.
First National Bank
FNB clients have 180 days from the transaction date, or the expected delivery date, to apply for a chargeback.
FNB customers should call 087 575 1111 to get the necessary form, which needs to be completed and e-mailed or faxed back.
Standard Bank gives its customers 120 days in which to apply for chargeback from the time the service has not been rendered.
E-mail Chargebacks.dis [email protected]
A big thumbs up to the Shoprite group for coming to the rescue of Velvet Sky would-be passengers who paid cash for their tickets at Computicket outlets.
In an unprecedented move, Computicket Travel offered to refund the estimated 1 600 affected ticket holders nationwide – to the tune of R2.2 million.
This was despite Computicket (which is owned by the Shoprite group) having paid the ticket money over to the airline. For more information, call 0861 915 4000.
For those who paid cash for the tickets, or made EFTs into Velvet Sky’s account, I’m afraid it’s not looking good.
The airline’s promises to refund “grounded” ticket holders within 21 days appear to have come to naught.