Credit Card Payment Reversal: Everything You Should Know

Credit Cards have become an essential part of our lives nowadays and one needs a lot of research to understand the working & benefits of credit cards fully. Many people apply for a credit card just by looking at its benefits, but they don’t search much about its terms and conditions and other factors that should be considered in such times. One such thing to be checked before choosing a credit card is to check its payment reversal policy.  There can be several reasons why a cardholder needs to reverse a payment. For example, if you have purchased a product online using your credit card and you find that it is not what you expected, you might want to return it and get a refund from your card issuer.

Some card issuers even allow you to return a defective product whose return period or warranty period is over. This facility is referred to as purchase protection and not every issuer, but most of the major card issuers nowadays provide this facility to their cardholders. In such a case, if the merchant denies a refund, the card issuer may give it to you from their end. This was a bit of necessary information about how credit card refunds work, but there are many more things that you need to understand about a credit card payment reversal. Keep reading the article for further information:

What is Credit Card Payment Reversal?

Credit Card Payment Reversal is a transaction that is refunded to a cardholder by the card issuer. The reason behind this can be anything, like a repeated transaction, a product that you (as a cardholder) want to return, a transaction that took place by mistake, or a transaction that was not made by you. Sometimes, getting a payment reversal is as easy as canceling a purchase, but sometimes it becomes a bit challenging. For example, if you have purchased a product that doesn’t come with a return period, but it is not up to the mark and now you want to return it. In such a case, you may use the purchase protection facility that is provided by your card issuer, or you can raise a dispute regarding the same.

Another example can be a transaction that is mentioned in your credit card statement or you have received a message regarding it, but you never made it. In such a situation, you will have to make your card issuer believe that you have really not made this transaction and it is a fraudulent one and you need a reversal for it.

Situations When You Can Ask For a Credit Card Payment Reversal

Every credit card issuer has its own return and refund policy, but there are some common facilities and services that almost all card issuers offer to their customers. The following are some of the common situations when you can ask your card issuer for a credit card payment reversal, no matter which credit card you have:

• You can request a payment reversal if an unauthorized transaction has been made on your credit card. The only this you need to keep in mind is that your card issuer will reverse the amount only if you have reported the loss to them in a timely manner (ideally within 48 hours). This is known as zero liability protection provided by credit card issuers, which keeps cardholders safe from fraudulent transactions if they report them to the bank in a timely manner.
• If you have returned a product, but the refund has not been processed even after the time period that is mentioned in the terms & conditions of your credit card. For example, if your card’s MITC says that the refund will be processed within 15 days from the return date, but it’s the 16th day and you haven’t received the refund. In such a case, you can contact your card issuer and raise your query.
• You can also request a payment reversal if an extra charge has been put on your account. For example, suppose you made a transaction worth Rs. 1,000 and the merchant has charged Rs. 1,500 on your card (either by mistake or intentionally), you can immediately contact your card issuer and they will ask the merchant to reverse the amount.
• Sometimes a transaction might be repeated by mistake or due to some discrepancies in the system of the merchant. For example, suppose you have made a transaction worth Rs. 500 and the amount has been deducted from your account, but the merchant’s system shows that the transaction is not successful. You might need to make the transaction again and pay for a single purchase twice. In this case, you can contact your card issuer and raise a dispute. The card issuer will check your transactions and will contact the merchant to reverse the extra amount.
• Another case where you can request a payment transversal is when you have made a cash withdrawal using your credit card and the withdrawn amount is not equal to the amount you entered in the ATM.
• Sometimes even after disabling auto payments on your credit card, the amount keeps on deducting every month. This can also be disputed by contacting your credit card issuer.

Bottom Line

In order to become a responsible and wise credit cardholder, you should not only be aware of the benefits and features of a credit card but also its terms & conditions. There are lots of essential things mentioned in credit cards’ most important terms & conditions and all of them should be checked carefully. The credit card payment reversal facility is provided by the card issuers to avoid their customers from fraud & losses, but the cardholders also need to keep a few things in mind. One of the most important points here is to contact your card issuer on time whenever you want to raise a dispute against a transaction or report an unauthorized transaction. This is how you can be an ideal credit card user.