Chargebacks are a common occurrence in the world of credit and debit cards. A chargeback occurs when a cardholder disputes a transaction with their card issuer, resulting in the funds being returned to the cardholder’s account. While chargebacks can be beneficial for consumers, they can also be a headache for merchants. In this article, we’ll focus on debit card chargeback time limits and everything you need to know about them.
What is a Debit Card Chargeback?
A debit card chargeback is a dispute process that allows the cardholder to request a refund for a transaction made with their debit card. The chargeback process is typically initiated when the cardholder notices a fraudulent transaction on their account, receives a damaged or defective product, or doesn’t receive the product or service they paid for.
The chargeback process is governed by a set of rules and regulations set forth by the card networks, such as Visa and Mastercard. These rules outline the responsibilities of both the cardholder and the merchant, as well as the time limits for initiating a chargeback.
Debit Card Chargeback Time Limits
The time limit for initiating a chargeback on a debit card is dependent on the reason for the chargeback. The chargeback reason code is a numerical code that identifies the reason for the dispute. Each reason code has its own time limit for initiating a chargeback. Let’s take a look at some of the most common debit card chargeback time limits reason codes and their associated time limits:
Unauthorized Transaction (Chargeback Reason Code 10.4) – The cardholder must initiate the chargeback within 60 days of the transaction date.
Goods or Services Not Received (Chargeback Reason Code 10.5) – The cardholder must initiate the chargeback within 120 days of the transaction date.
Fraudulent Transaction (Chargeback Reason Code 10.2) – The cardholder must initiate the chargeback within 120 days of the transaction date.
Defective Merchandise (Chargeback Reason Code 53.1) – The cardholder must initiate the chargeback within 120 days of the transaction date.
It’s important to note that these time limits are set by the card networks and may vary depending on the specific card issuer.
The Chargeback Process
If a cardholder wishes to initiate a chargeback, they must contact their card issuer and provide evidence to support their claim. The card issuer will then review the dispute and may issue a temporary credit to the cardholder’s account while the dispute is being investigated.
The merchant will then have the opportunity to respond to the chargeback by providing evidence to support their position. If the merchant is able to provide sufficient evidence, the chargeback may be reversed, and the funds will be returned to the merchant’s account.
Debit card chargebacks are a common occurrence and can be a headache for merchants. Understanding the time limits associated with each chargeback reason code can help merchants better manage the chargeback process and minimize the impact on their business. If you’re a merchant, it’s important to keep accurate records of all transactions and be prepared to respond to chargebacks in a timely and professional manner.