A credit card chargeback is a term often used by credit card companies that describes the action of asking a credit card to “reverse” a charge to your bill. This is usually necessary if you have fraudulent purchases, or if you buy something and the company never sends the product (or sends the product in a way that is radically different than what was promised).
Credit Card Chargebacks: When You Should Use Them
In my 10 years of credit card use, I have only had to file 1 chargeback. The story goes like this: I was at the time selling on eBay, and always looking out for merchandise that I could resell for a profit. So I was looking for bulk lots on eBay one day, and came across a nice lot of Ipods. These were hugely popular at the time and this lot was priced so that I could make approximately $40 or more profit per ipod. It was a bulk lot of them.
So I carefully read the listing, and then payed via Paypal with my credit card. Unfortunately, it turned out that the whole listing was a scam. An innocent eBay member had their account phished (hacked) by a thief. This thief was creating fake listings to get a quick buck.
I was so stressed and devastated because the total cost came to about $1,500.00, and I had thought I lost the money forever. I went through Paypal, but they were only able to recover half of that amount. I then felt a little better, but was still devastated. I couldn’t afford to lose that money at that point in time at all.
So I called my credit card company and explained the situation. They immediately reversed the rest of the $750, and said they would investigate it. I was so thrilled, and I was much more cautious when buying on eBay from that point forward.
Moral of the Story: Chargebacks Are Great, If Used Correctly
Chargebacks are great to help you stay safe. If you ever get scammed, then you can have piece of mind knowing that your credit card offers a solution for you to help protect you from fraud. Simply call the credit card company, and tell them you need to chargeback an item (or report a fraud purchase).
Just don’t abuse this. If you file a chargeback fraudulently, you can get in trouble yourself. Because then you are the one who is a fraud. Instead, just keep chargebacks in the back of your mind, and if you ever get scammed, use it. It will help keep you financially safe.
Oh, and if you ever worry about using a credit card online, you could always use a prepaid credit card.