How to dispute a credit card charge
Start with the merchant to find satisfaction, and then escalate if that doesn't work.
Last month, I went to a Trader Joe’s to buy a package of coffee filters. For whatever reason, their packages of unbleached cone filters are always remarkably cheaper than anywhere else, despite Trader Joe’s higher-end reputation. On this particular trip, there was some sort of technical problem with the register.
I would swipe my card, sign in the box, and then the system would skip the receipt printout step. Each time, the person working the counter would politely insist that the charge didn’t go through and we’d have to swipe it again. We did this three times.
Unfortunately, the only technical problem was that a receipt wasn’t printed and it wasn’t until a week later that I saw I had three charges for one box of coffee filters. The annoying part about all this was that the charges were for only $1.80 each, which meant I was only out $3.60. Part of me wished it was more like $360 so that it would be more worth my time to deal with it.
If you need to dispute a credit card charge, here’s what you should do:
- Understand the law. Consumers are protected by the Fair Credit Billing Act and we have the right to dispute a credit card purchase or withhold payment for a purchase if it satisfies certain conditions. It pays to know these rules even if you don’t have a pending dispute so if you’re unfamiliar, I recommend giving this a once over.
- Try to resolve it with the merchant. This should always be your first step because this is the easiest path to resolution. If you can convince the merchant that it made a mistake, you won’t need to involve the credit card company. I always try an informal approach followed by a formal, certified, return-receipt-requested mail approach if being a nice guy doesn’t work. Some companies are reasonable, some companies are not.
- Dispute the charge with the credit card company. If you can’t get the merchant to agree or if you can’t locate the merchant, then the credit card company is your only other option. I recommend using the online dispute system if they have one, or certified, return-receipt-requested mail if they don’t.
- If the credit card company rejects your claim and the merchant argues, go bigger. Contact your local Better Business Bureau for assistance or even the local media if you feel you have a good case. Many local news stations love to do consumer-protection pieces and it could be enough to change the merchant’s mind about the situation. If it’s a large merchant, consider enlisting the assistance of The Consumerist or use an "executive e-mail carpet bomb" to get the results you want.
However, the most important tip to take away from this is to avoid disputable charges in the first place. If there is any ambiguity, try to have it clarified before you buy.
After a sale, save your receipt and warranty if they exist. Your credit card will protect you from outright fraud, but there are a lot of gray areas where documentation will be very important.
In the end, I opted to let the charges go because it just didn’t make sense for me to make the trip and spend the time required to get the charges reversed.
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