Unhappy with a purchase? When to dispute a credit card charge

I ordered custom dance shoes online a few months ago. My feet are narrow, and no brick-and-mortar shop seemed to have what I needed – at least not in the color or materials I wanted. I found a site that offered what I was looking for (and claimed it would make and deliver my shoes in 30 says). So I placed an order with my credit card.

Highwaystarz-Photography/iStock/Getty Images

Highwaystarz-Photography/iStock/Getty Images

Five weeks later, no shoes. I emailed the merchant, who apologized and promised my shoes would be shipped “in a few days.” Ten days later, still no shoes. The merchant ignored my follow-up emails and requests for a package-tracking number. Seven weeks from ordering, the shoes were still MIA, and the merchant wasn’t returning voicemails or emails. So I began researching a protection offered by credit cards – the ability to dispute a charge.

I reached out to Cindy Watson, assistant vice president of operational support at Meriwest Credit Union, and Melisa Brandis, card service specialist with Meriwest, to learn more about what the dispute process looks like – and when you should flex this powerful consumer protection.

How to dispute a charge

The ability for consumers to dispute charges is governed by the Fair Credit Billing Act (FCBA), although individual issuers’ processes may differ slightly from one another within that framework. It’s the same framework that allows you to dispute billing errors and fraudulent transactions.

Meriwest members can initiate a dispute by phone or via online banking, Brandis says. Either way, you’ll be required to provide documentation of the issue.

“We need to know which transaction they’re disputing, which merchant it was and things of that nature,” Watson says. “We begin the investigation as soon as the consumer reports the dispute.”

Meriwest cardholders can relay the necessary information on the phone, let the rep document it and then sign the paperwork. Or, Meriwest can mail the documents that need to be filled out (called the dispute packet) so that you can fill it out at your leisure.

Some issuers, Meriwest included, will give you a provisional credit (when applicable) for the disputed amount.

“From there we begin consistently communicating either by phone or mail with the consumer so they know the status of the investigation,” Watson says.

Behind the scenes, a process called the chargeback is unfolding. Your financial institution’s processor will work with the merchant’s bank to have the amount of the disputed charge withdrawn from the merchant’s account. The merchant may fight back. The charge may be deemed legitimate, and if so, you can expect that the provisional credit you received to be revoked. If the losing party pushes back, it might lead to arbitration.

“But our goal is to get our members’ money back,” Watson says.

Tips for a successful dispute

As frustrated as you are with a purchase, there is such a thing as filing a dispute too soon. Keep the following guidelines in mind:

Contact the merchant before your card issuer: Don’t unleash a dispute the day your package is late, or the moment you realize the dress is the wrong color. Give the merchant a chance to do right by you.

In fact, Meriwest requires members to contact the merchant first and provide documentation of that communication.

“The only time we’d consider the dispute too soon is if they haven’t attempted to resolve it with the merchant,” Brandis says.

Meriwest also requires that you wait 15 days from contacting the issuer before you initiate a dispute.

“That gives the merchant time to determine how they’re going to resolve it,” Watson says. “In some cases, they might replace the item or refund the money. Most merchants do work with the consumer.”

Don’t wait too long: Federal banking regulations give you 60 days from the date of the statement that includes the charge in question to dispute it. However, if you’ve run down that clock communicating with an uncooperative merchant, you may not be out of luck.

“Every situation is unique,” Brandis says. “If they can provide a valid reason as to why it was delayed, [the dispute] can be considered.”

In most cases, though, 60 days from the statement containing the charge is plenty of time, Brandis and Watson note. Post-60-day disputes are generally not merchandise-related, but fraud related, in Brandis’s and Watson’s experience – while you’re probably waiting for a package with baited breath, you may not be as vigilant about checking your transaction history for fraud.

Know the merchant’s return policy: Some disputes arise when a consumer returns merchandise and is confused when the merchant never issues a refund. However, if you didn’t make the return in accordance with the merchant’s terms, your dispute will not successful. For example, Watson says, maybe you bought something on clearance and don’t like it, but the merchant doesn’t allow refunds for clearance items. Or perhaps you missed the merchant’s deadline for returning the merchandise.

“Every customer should be aware of what the return policy is for every purchase they make,” Watson says. “When you’re shopping online and click ‘I agree,’ always make sure you know what you’re agreeing too.”

So was my dispute successful?

Oddly, I never needed to dispute the charge. A couple days after I interviewed Watson and Brandis, I got an email from the merchant with package-tracking information. My shoes arrived days later – and fit perfectly.

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