Chargeback

Let's say you're buying a product or service from an unknown merchant on a not-so-popular website using a debit card. What can you do if the merchant disappears? You could make a complaint at various levels and hope you get the money back.

But if you purchased it using a credit card, you're a lot more safe — you're automatically covered with buyer protection. You can ask the credit card issuer to refund the transaction stating the issue.

This is known as chargeback globally and dispute in India.

If you're a merchant, chargebacks can be frustrating. If you're a consumer, chargebacks are a godsend — acting as a shield between you and dishonest merchants.

The process of disputing a transaction varies from one issuer to another.

Some may just require a call to customer care (like Amex), some may need a signed document (like HDFC, ICICI), and some may even need a FIR (like Axis).

Along with this, depending on the type of transaction, your card may be blocked while disputing and a new card will be issued.

As soon as you initiate the dispute with the credit card issuer, the investigation process begins. The usual investigation period is 45 to 90 days.

In the normal course of investigation, the merchant's bank is expected to revert to the query within 45 days. The 45-day period is as per current time frames of card networks like Visa / MasterCard / Diners.

If the bank receives proof in support of the transaction in dispute, the same would be sent to you for your review and further steps.

The investigation may take weeks or months, but your credit card bill may get generated before it ends.

To give you peace of mind, the credit card issuer will give you an interim (temporary) credit during the investigation period so you don't need to pay that amount in the meantime.

If the investigation ends in your favour, there won't be any change. If it favours the merchant, the disputed amount would be charged to your bill.