If you’re considering filing a credit card chargeback for an airline ticket, cruise fare, hotel room reservation, or rental car, you’re not alone.
Your fellow travelers have the same idea. The financial services industry has coined a phrase for this: the big rise in chargebacks of 2022.
A quarter of all online shoppers in the US, Australia and the UK 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 initiate a chargeback at least once a month.
It’s true, monthly.
This is part two of a series on credit card disputes in the travel industry. In part one, we looked at expert advice on filing a chargeback. Today we feature customers who have successfully filed credit card disputes.
Credit card disputes may seem like a quick fix – and an easy way to get revenge on a company that has wronged you.
“It can be very difficult to control your emotions when something goes haywire while you’re traveling,” says Matt Schulz, LendingTree’s chief credit analyst. It’s so easy to hit the “dispute” button on your banking app and get a full refund for that substandard hotel stay or theft from hell.
But Schulz and other experts warn that the key to a successful credit card dispute is staying calm.
“The more you resist taking out all your frustrations on the person on the other end of the line, the better your chances of resolving your issue on your own terms,” he says.
As I noted in part one of this series on 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 should carefully review your card dispute and keep your eyes on the clock. Also, use this tool sparingly, as repeat offenders are less successful and could possibly lose their credit card.
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 hiring overseas, so he says he’s always “prepared for the worst”.
How are you preparing? You’ve read the fine print. All. And when Pow reviewed his contract, he found an unusually high charge — $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 charge.
Before returning the car, he found the nearest gas station and filled it up.
“I decided to take pictures of the GPS, just to be sure. The picture clearly showed that there was no other gas station between it and the rental office,” Pow recalls, the CEO of a financial website.
Of course, the car rental company charged him a $50 fee.
“When I got home, I tried to talk to them but without success,” he says. So he filed a credit card dispute.
“I finally won the case, got my money back and was told that the photos I sent weighed very heavily in the decision to get my money back,” he recalls.
Be patient if you want to win your credit card dispute
Chargebacks can go on forever – and continue. Although some agreements with credit card merchants require companies to process disputes quickly and resolve them within a month, the reality is that complicated cases can take time. It 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, NY. But the airline fought the dispute and his bank took the money back.
Most travelers are unaware that there is an appeals process that can extend a chargeback for months. You may need to submit it to arbitration if there is still no resolution.
Eventually, her airline dropped the claim and she got her $3,050 back. She probably should have given Singapore the 16 weeks she wanted. (Remember that most credit cards allow at least 120 days for a dispute.)
Know the flaws
I have filed credit card disputes and negotiated thousands of cases involving credit card disputes. And believe me, there are flaws.
For example, I filed a chargeback claim against a pet store in Florida many years ago. I had bought a parrot that died within 24 hours. Loophole 1: My bank did not accept live animal disputes. I skirted 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 second loophole: the company sent me a letter agreeing to refund the purchase, but canceled it later. My bank’s credit card dispute department took this as a credit memo and sided with me.
But loopholes can also work in favor of companies. Dennis Shirshikov, a real estate investment company strategist, says most credit card companies won’t refund fees from companies that traditionally have responsive refund teams, like Amazon.
“Instead, they’ll help mediate a request and get it straight for you,” he says. “It started before the pandemic, but the trend has really accelerated since then.”
So this is it. Preparation, patience, and knowing the exceptions can improve your chances of a successful credit card dispute.