Lets Talk about Credit Card Chargebacks (COVID-19 Related)

jimbobaus on 03/04/2020 - 01:31
Last edited 03/04/2020 - 01:32

In recent weeks I have seen a lot of posts relating to (mostly) travel related events being cancelled and posters asking how they can get a refund instead of a Credit or Voucher.

In the comments its almost certain that someone will comment
"Contact you bank and do a charge back"
"just charge it back"

The reason I am posting this is to point out a few issues with suggesting this or taking this action in the current climate.

Firstly lets look at your rights as a consumer in the current climate you can see the rules here:

https://www.accc.gov.au/consumers/consumer-rights-guarantees…

One thing to be aware of is that the fact that most of these cancellations are a result of Government decisions, this in some ways reduces your rights under consumer guarantees.

So If an airline offers me a voucher can i just charge it back?

Well let me explain (from working in the industry) how Charge Backs work:

1) Consumer contacts bank and raises a dispute
2) Consumers Credit Card is credited with funds within 3-5 Business days if claim fits into bank criteria.
3) Money is reversed from merchant and merchant is advised of reasons for reversal
4) Merchant is asked to provide evidence that the transaction is legitimate (signed contracts, Acceptance of terms and others)
5) Bank reviews evidence and either closes in Customer or Merchants Favor
IF FOUND IN MERCHANTS FAVOR THE MONEY WILL BE TAKEN BACK FROM CUSTOMER

So, can you charge it back to the Airline if they only offer you a credit?

Short Answer: NO

Long Answer: The airlines are permitted under the law to offer you a credit in place of a refund due to the cancellation being a result of government action. Any attempt to charge back will fail, the airline will appeal and they WILL 100% WIN and you will be out of pocket and there is a pretty good chance you will be blacklisted by that airline.

Charging back to your card will not end up working in your favor long term, almost every operator (airline, accommodation and so on) will have measures in place to fight charge backs and if you ever want to use them again you risk not being able too due to your reversal of the payment against their terms and conditions.

Anyways i am anticipating some heated comments below
But thought i would share some insight as these facts seem to be ignored or glossed over in comments on certain posts

Financial COVID-19 Credit Card

Comments

  • John Kimble on 03/04/2020 - 02:08
    +2

    A lot of people getting blacklisted soon then…

  • capslock on 03/04/2020 - 07:34
    +1

    This is OzBargain. The advice people give out here is always to do a chargeback. I don’t think that will ever change.

    • Ughhh on 03/04/2020 - 10:00

      Yep, cause they're not the one getting black listed or dealing with it. No harm or consequences giving poor advice.

  • spal on 03/04/2020 - 08:07

    Thank you for the post. I am in a similar situation. Airline has cancelled our flights and has asked us to contact them for a refund. However, if we booked through a travel agent, we are to contact the agency. The agency is totally not responding. They have pretty much gone into a lockdown. All requests are responded with a generic email.

    I had paid for priority service and ticket cancellation protection fees to the agency.

    We, didn’t have any option other than to pursue chargeback.

    Do you have any suggestions for the scenario.

    Thank you.

    • lakers1222 on 03/04/2020 - 08:09
      +1

      Airline has a set amount of time to reply to bank's request, if they don't, you'll get your money back.

  • lakers1222 on 03/04/2020 - 08:07
    +9

    This post is scare tactic. I did a charge back for a Flight Center booked flight. 28 Degrees decided in my favor.

    Flight center received a full refund from the airline, and didn't want to refund the full amount. They insisted the $300 service fee (per ticket) was not refundable because it would be like taking commission out of their colleagues pocket.

    • netjock on 03/04/2020 - 11:18

      Commission for something that couldn't be delivered. If they could at least split the cost given the circumstances.

      An agency was forthcoming with the cancellation and charged a $20 fee for a flight. Better than spending 1hr on the phone with the airline.

      Another agency is being an idiot about it. Oh your airline hasn't said anything about the refund (when they have said about refund / credits) and the destination + Australia is enforcing 14 days quarantine on a 10 day trip (well that is 28 days holiday in a hotel room for the price of 10, should post as a bargain.

    • jimbobaus on 04/04/2020 - 09:27
      -1

      As i stated, the credit card company will refund you within a very short time frame.
      It can take up to 3 months for a review to be completed, the merchant has 60 days to provide said evidence.

      So it may have been found in your favour initially but this situation can change once the review is completed.

      I know for a fact Flight Centre has a dedicated team that deals with Chargebacks and are quite good at what they do.

      at the end of the day, the credit card company won't be the one out of pocket at end of the day.

      • lakers1222 on 04/04/2020 - 18:18
        +1

        Here are some facts, so you can stop assuming. Flight centre has provided their statement, and 28 degrees dispute team has decided in my favor as Flight Centre has not provided me with the service that I paid for. It is basic consumer rights.

        I know for a fact Flight Centre has a dedicated team that deals with Chargebacks

        Good luck to your mates at Flight Centre. I understand why you posted this now. You should have announced you are affiliated or know someone who is affiliated.

        at the end of the day, the credit card company won't be the one out of pocket at end of the day.

        You're right, the credit card company is not out of pocket, they have refunded me by taking money from Flight Centre.

  • djsweet on 03/04/2020 - 10:20
    +1

    I think a good take-away from this is: Always book flights though the Airline directly.
    I wish I had done that, unfortunately I booked through Aunt Betty and now I have to deal with a s***storm to get my money back. If travel agencies go under because of this I won't shed a tear. Most cases useless middlemen anyway.

    • netjock on 03/04/2020 - 11:20

      If travel agencies go under because of this I won't shed a tear

      They make a cut. Charging $20 or $40 to explain as staying in business fee wouldn't be bad. But stone walling. They will definitely go under rather than staying alive.

  • crashloaded on 03/04/2020 - 11:00

    I'm fine receiving a credit for my flights I had booked. However, I had a camper booked with Apollo campers, they have only offered a credit for new dates, so I sent them new dates. They can't provide the service for my new dates. So am I entitled to a charge back?

  • deal-pickle on 03/04/2020 - 13:29

    How does travel insurance play into this?

    If the airline (Cathay Pacific in my case) is offering full refunds, but the travel agency (Expedia) is only offering airline credit, can I force Expedia to pass on the refund, and if not, would I be able to claim the amount on my travel insurance (Citibank with Allianze)

  • CMH on 03/04/2020 - 17:17
    +2

    I just called up my CC company (Westpac) and they confirmed if TA won't refund the full amount a chargeback is on the cards.

    • spal on 03/04/2020 - 18:18

      Thank you. This is helpful to know. I am with Westpac. The disputed amount was not taken from my auto direct debit. I was told that unless the dispute is resolved I will not be asked to pay, and I will not need to pay any interest on the amount. Although, there hasn’t been much progress other than they are looking into it.

      • CMH on 03/04/2020 - 21:11

        I must say I'm hoping that the airline will be happy to change it to an open ticket, valid for 24 months.

        I might even be happy with 12, but 24 would be much better.

        Will leave it up to the TA to negotiate with the airline.

    • jimbobaus on 04/04/2020 - 09:14

      Problem with advice like this, is Westpac may not be TA's bank and its their bank that will fight on behalf of the merchant.
      Westpac can advise you to do a chargeback, but they cant guarantee it will be found in your favour.

      all chargebacks are found in your favour initially, its when the process ends that you really find out the result.

  • serfty on 04/04/2020 - 08:37

    @jimbobaus what happens if you reluctantly accept said credit but are unable to redeem it before the airline expires it?

  • tanksinatra on 04/04/2020 - 10:15
    +2

    I am not a lawyer but I think there is more to the story than what the OP is saying.

    The government has not banned domestic flying. Domestic flights have been cancelled due to business decisions (reduced demand). Hence the usual obligations under the ACL still apply for domestic flights.

    For international flights could one argue that the contract has been frustrated (due to travel bans & COVID) and hence no longer applies?

    • spal on 04/04/2020 - 13:22

      Why would someone neg you. You are only trying to put in a point of view.

  • meong on 17/04/2020 - 10:02

    has anyone actually succeeded in getting a refund or chargeback?

    • mblack77 on 28/04/2020 - 15:42

      Yes, reading around it seems like some have. But this is dependent on the position the bank/financial institution take, and the readiness of the travel agent to argue their case. As time goes on and this becomes a more popular request, I would think banks will have standard procedures to expedite this.

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