What To Do Before And After Chargeback


The chargeback is the most powerful tool in your arsenal as a credit card holder.    Chargebacks can be used whenever there is an unauthorized charge, or the products or services charged are not delivered, or are substantially different than ordered.

Case In Point

Take for example, this post in The Consumerist.   The author describes how Delta ignored his voucher and charged him for a higher price.    At first Delta agrees to a refund, but fails to deliver.   Now, the author can’t even get in touch with Delta.    The author claims that the chargeback was denied by Visa because he is using a voucher.

First, I have never heard of the usage of a voucher as being the reason for denying a chargeback.    A voucher is essentially just a coupon, and I can’t see how Visa can say that they won’t consider a chargeback if you are quoted and authorize one price with a voucher, and are charged another.     At this point, I would have to speak with a supervisor at Visa to get them to reconsider.

Before The Chargeback

One trick that I have learned is that companies, especially airlines, live in fear of chargebacks.   Chargebacks end up costing a merchant in terms of extra merchant fees on every single transactions.    Knowing that, you can effectively threaten a chargeback effectively without actually using it.    When I have had an airline charge an unauthorized fee to my credit card, I spoke with a supervisor and explained that they would be refunding me that fee, or I would file a chargeback.    After being offered more vouchers, which I refused, I was issued a check because I stuck to my guns.    When you authorize a charge at a price, an airline or any other merchant cannot charge you a different price.   If they do so, it is unauthorized and can be disputed.

After A Chargeback

Even if the author is unable to get Visa to reconsider his chargeback, there are still a few options left.    First, he could still threaten a chargeback, as Delta would be unaware that Visa is not allowing him to file one.    It would be a bluff, but he has nothing to lose.   Another option would be to file a case in small claims court.    This will engage the company’s legal department, who would probably be more interested in letting him use his voucher than traveling to your home city to defend a case in court.

Some of the commenters suggest launching and Executive Email Carpet Bomb or EECB.   This is the technique where you write a brief, polite, email to the executives of a company, in the hope that their desire to achieve customer satisfaction will motivate them to cut through the red tape and do the right thing.

Finally, the author has already achieved some measure of success just by posting his problem on the Consumerist.   Companies do take note of stories like this on travel and consumer web sites, and would like to correct the problems that get the most publicity.    Typically, the web sites then follow up with a story about how the original company did the right thing.   In that way, bad publicity is turned around and becomes good publicity.

Let’s hope that is the case with problem.

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