If you’re thinking of filing a credit card chargeback for an airline ticket, cruise fare, hotel room booking, or rental car, you aren’t alone.
Your fellow travelers have the same idea. The financial services industry coined a phrase for it: The Great Chargeback Surge of 2022.
One-quarter of all online shoppers in the United States, Australia and the United Kingdom have filed a dispute against a merchant in the past 12 months, according to Aurora Payments, a payment systems provider. More than one in 10 initiates a chargeback at least once a month.
That’s right, monthly.
This is part two of a series on credit card disputes in the travel industry. In part one, we reviewed the expert advice on filing a chargeback. Today we’re featuring customers who have filed successful credit card disputes.
Credit card disputes may seem like a quick fix — and an easy way to exact revenge on a business that has done you wrong.
“It can be really hard to keep your emotions in check when something goes haywire when you’re traveling,” says Matt Schulz, LendingTree’s chief credit analyst. It’s so easy to push the “dispute” button on your banking app and get a full refund for that substandard hotel stay or the flight from hell.
But Schulz and other experts warn that the key to a successful credit card dispute is keeping cool.
“The more you can resist taking all of your frustrations out on the person on the other end of the line, the better your chance of getting your issue resolved to your liking,” he says.
As I noted in part one of this series about credit card chargebacks, you should have a strong case and allow the travel company to respond before moving forward. If you file a chargeback, you have to carefully vet your card dispute and keep your eyes on the clock. Also, use this tool sparingly, because repeat offenders are less successful and ultimately could lose their credit cards.
Winning a card dispute starts even before there is a dispute
Alec Pow recently rented a car in Rome. He’s never had much luck with renting abroad, so he says he’s always “prepared for the worst.”
How do you prepare? You read the fine print. All of it. And when Pow reviewed his contract, he found an unusually high fee — $50 — for a car returned with less than a full tank of gas. Typically, car rental companies charge you an inflated price for refueling but no fee.
Before bringing the car back, he found the nearest gas station and filled the tank.
“I decided to take pictures of the GPS, just to be safe. The picture clearly showed that there was no other gas station between this one and the rental office,” remembers Pow, the CEO of a financial site.
Of course, the car rental company charged him the $50 fee.
“When I got home, I tried talking to them but to no success,” he says. So he filed a credit card dispute.
“I eventually won the dispute, got my money back, and was told that the pictures I sent weighed very strongly in the decision to get my money back,” he recalls.
Be patient if you want to win your credit card dispute
Chargebacks can drag on — and on. Although some credit card merchant agreements require companies to address disputes quickly and resolve them within a month, the reality is that complicated cases can take time. That happened to Rebecca Engelmann when she canceled her Singapore Airlines tickets because of the pandemic. An airline representative told her she had to wait 16 weeks for a refund, so she filed a credit card dispute.
“Our credit card company refunded the money as a courtesy,” says Engelmann, a teacher from White Plains, N.Y. But the airline fought the dispute and her bank took the money back.
Most travelers don’t know that there’s an appeals process that can extend a chargeback by months. You may have to take it to arbitration if there’s still no resolution.
Eventually, her airline dropped the claim, and she received her $3,050 back. She probably should have given Singapore the 16 weeks it wanted. (Remember, most credit cards allow at least 120 days for a dispute.)
Know the loopholes
I’ve filed credit card disputes and I’ve mediated thousands of cases involving credit card disputes. And believe me, there are loopholes.
For example, I filed a chargeback against a pet store in Florida many years ago. I had purchased a parrot that died within 24 hours. Loophole 1: My bank did not accept disputes on live animals. I got around that by pointing out that the Fair Credit Billing Act, which allows credit card disputes, does not allow banks to limit the types of disputes they accept. And besides, the bird was dead.
And loophole two: The business sent me a letter agreeing to refund the purchase but rescinded it later. My bank’s credit card dispute department regarded that as a credit memo and sided with me.
But loopholes can also work in the businesses’ favor. Dennis Shirshikov, a real estate investment company strategist, says most credit card companies won’t refund charges from companies that traditionally have responsive refund teams, like Amazon.
“Instead, they will help mediate a request and get it for you directly,” he says. “This started before the pandemic, but the trend really accelerated since then.”
So there you have it. Preparation, patience and knowing the exceptions can improve your chances of a successful credit card dispute.