What is Chargeback?
Generally speaking, where Cardmember use Cards to make lump-sum payments for goods and services and have disputes over the transactions later on, Cardmember is eligible to apply for a refund of the payment for such disputed transaction (“chargeback”). Chargeback is a mechanism set out by Card Associations (e.g. Visa and MasterCard) which allows transaction to be reversed and makes refund of the disputed amount to the Cardmember under certain circumstances. For example, if the merchant failed to deliver goods or services that have been paid by credit card, or the goods delivered are damaged or do not comply with product specifications, Cardmember can contact the card issuer and request a chargeback.However, the chargeback request is subject to certain rules and criteria set by the respective Card Associations, for example, the request may fail if it is not raised within relevant timeframe.
General (simplified) process flow of the chargeback mechanism
Step 1: Cardmember raises transaction dispute request and provides relevant supporting documents
Step 2: American Express (acting as Card issuer and merchant acquirer) assesses and raises chargeback request (if applicable) to merchant
Step 3: Merchant provides refund to American Express (if applicable)
Step 4: American Express provides refund to Cardmember (if applicable)
Role of the Card issuer:
American Express acts as a Card issuer and merchant acquirer. After obtaining the details of the disputed transactions from Cardmember, it will review if relevant supporting documents of the request have been provided and raise chargeback request for Cardmember against the merchant. If the chargeback request is accepted by the merchant, the dispute amount will be reimbursed to Cardmember’s account.
What type of transactions can the Cardmember dispute?
A Cardmember may request a chargeback for a number of reasons, including, but not limited to:
- Transaction amounts which the Cardmember believes are incorrect;
- Transactions which the Cardmember believes he or she did not authorize;
- Duplicated transactions;
- Goods or services that the Cardmember did not receive at all or within the agreed timeframe (in such cases you should contact the merchant in the first instance)
How to initiate a chargeback request?
- Cardmember should raise the dispute within 60 days upon the statement issuance date by calling the number at the back of your Card or completing the Cardmember Transaction Dispute Form and returning to us.
- Acknowledgement email/ letter will be sent to the Cardmember upon receiving the chargeback request. Any documentation which is required from your end to address the claim will be advised as required.Supporting documents may include but not limited to the relevant transaction receipt(s) or the service agreement/ contract or the proof of the merchant failure to deliver goods/ services (if applicable). Upon receipt of the documents, the case will be evaluated to ascertain if the rules and conditions of chargeback are satisfied. The documents provided by Cardmember will then be sent to the merchant to sustain the chargeback when it is required.
- After we receive the chargeback request and all the relevant supporting documents from Cardmember, we will suspend the disputed transaction to such Cardmember’s account after the case is set up.
- The dispute will normally take up to 6 – 8 weeks for investigation processing with the merchant. The dispute case is closed if no representment is received from the merchant within 6 to 8 weeks. Otherwise, American Express will contact the Cardmember for follow-up.
If the above dispute transaction is found out to be valid/ correctly billed by the merchant, American Express will debit the above Card account for the transaction amount and the interest incurred.