Challenging a credit card transaction
A chargeback is a transaction in which a cardholder asks his or her bank to cancel or reverse a payment transaction. This can be done regardless of the payment method used. However, it has to be said that it ismuch easier and often more efficient to do so via your credit card issuer.
3 situations to challenge a transaction
You can legitimately challenge a transaction in one of these 3 main scenarios:
- A fraudulent transaction (e.g. as a result of theft);
- A duplicate transaction (when there was only one purchase);
- A good or service not received.
Over the past few years, I have needed to use this option twice.
My experience challenging a CIBC VISA card transaction through Paypal
We were travelling to Europe in the summer of 2015 and there were 7 of us travelling together. We were therefore looking for a private carrier that can drive us during 3 very specific moments of our trip.
We found a supplier on the Web who could guarantee us the 3 rides on board a minivan-limousine. We agree on a price, then the supplier asks me to pay it in full in advance via Paypal.
I pay for it using my CIBC VISA Aeroplan credit card linked to my Paypal account.
The first two rides went as planned and we were very satisfied with the service provided. But everything went wrong during the 3rd ride, the most important for us since it had to bring us back to the airport, 90 minutes from where we were.
We searched for our carrier… to no avail. “Panic” among the family.
We finally spoke with the carrier who told us that the driver was on his way. Time is running out and our plane won’t be waiting for us!
After more than an hour of waiting, we switch to plan B and find a local driver who agrees to pick up all 7 of us with our suitcases and drive us to Hamburg airport. Of course, we paid the full price for this trip on the spot.
Back in Montreal, I took the necessary steps with the transportation provider to get compensation and reimbursement for the transportation that he did not provide us with. He asked me to send him a Paypal payment request, to wait until September for tax reasons … In short, I realize after a while that I’m being taken for a ride and that he has no intention to refund me.
So I contacted my credit card issuer and told them that I want to challenge a transaction. CIBC opens a file number and asks me to write them a short letter explaining the situation and to attach any useful document (ex: invoice, email exchanges, …).
Two weeks later, I received a $310 credit on my credit card and the file was closed.
Even if the payment had been made via Paypal, I got my money back through my credit card issuer. And even though it was really just a matter of recovering only a portion of my payment, it went very well with CIBC.
My experience of challenging a transaction on an American Express card and a Paypal payment
Last November, I saw on social media the announcement of a cool new product that would look great as a home decoration.
I followed the steps on the company’s website and I ordered 2 items. The site uses Paypal and I pay with my Marriott Bonvoy™ American Express® Card which is linked to my Paypal account (I am trying to spend 1500$ to trigger the welcome bonus).
I receive an order confirmation from the supplier and so far everything looks good.
Then I receive a first email confirming that my purchase has been shipped… but I don’t receive anything. I write to them and they mention that there was a mistake in the address. 2 weeks later, I receive a second email confirming the shipment of my purchase but I still don’t receive anything. I write to the supplier again and surprise, my email bounces back!
I then did several searches on the Internet and notices that, according to ripoffreport.com, several others had also been scammed. They shared their experience and it is strangely similar to mine. They never received the product, no way to contact the supplier…
I therefore decide to challenge the transaction with American Express. To do so, I go through the “Contact us” section of the website.
And I chose the “Challenge an operation” option.
Editor’s note: It is also possible to challenge it directly from the transaction on your American Express account (several questions will then be asked).
I got the following response from American Express and a credit of $65.40 was immediately applied to my account during the American Express investigation.
Following American Express’s efforts to challenge the transaction with the supplier, I conveniently received the merchandise ordered on the Internet at home. So the pressure from the card issuer allowed me to finally get what I had bought.
In the spirit of honesty and candour, I wrote to American Express to let them know that thanks to them I finally received my merchandise and that I no longer wished to challenge the transaction.
In the first example, the challenge allowed me to recover an amount for a service that was never provided. In the second case, the challenge allowed me to finally receive the merchandise I had ordered.
Just because you have paid for a transaction with your credit card and have paid the balance on your card does not mean that you lose all your recourse. Getting your money back when you have paid cash or even by debit card is much more complicated. With credit cards issuers, the process is well established and results are often achieved.