Credit card companies allow customers to make chargebacks, or to reverse a payment when a service does not live up to their expectations. Chargebacks should always be used responsibly when you need to make a request for a refund that the merchant doesn’t approve of.

Here are a few things to know about credit card chargebacks:
1. Always talk to the merchant first – Chargebacks do not look good for vendors. So, if you want to get a refund for something you’ve purchased, always try to work it out first with the seller. Too many chargebacks for a merchant usually leads to higher credit card processing fees for the seller, and a bad reputation that may end in the company losing the right to accept credit cards.

2. Use chargebacks as a negotiating point– If you want a refund for a purchase, and the business doesn’t see it the same way you do, always mention that you intend on doing a chargeback. This is a very powerful negotiating tool, one which can keep you from having to make a chargeback request in the first place. Knowing your consumer rights is very important.

3. You’ll need a receipt – You have to prove that you know what you purchased when making a chargeback. A receipt will help. If the chargeback is for a payment that you did not authorize, then you have more leeway in needing to prove the purchase. At any rate, you’ll need to explain to the credit card company why you want to make a chargeback, and the more information you have available, the smoother the process will be.

Making a chargeback is a very serious event. In effect, the credit card transaction will be reversed, and your credit card will be credited in the amount of your purchase. The merchant’s receivables will be debited by the amount of your purchase, essentially reversing the transaction all together.

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