Regardless of how you pay for it, you are entitled to a full refund on faulty goods within 30 days. After 30 days, you are entitled to a repair or replacement for up to 6 months.
If you have just changed your mind, you don’t have a right to a refund under the Consumer Rights Act, although many retailers offer refund or exchange within a certain time limit as part of their returns policy.
Why are credit card refunds different?
One of the main advantages of buying things on a credit card rather than a debit card is that if you need a refund because something is not as described or faulty, or the retailer goes bust, the credit card provider, not just the retailer, is responsible for making sure you are not out of pocket.
This is because of something called “section 75 of the Consumer Credit Act, 1974”, which states that on purchases of single items worth between £100 and £30,000, the provider is jointly liable with the retailer if you don’t get what you paid for.
The purpose of this legislation is to protect people from going into debt for things they didn’t receive, or were not as described.
Are credit card refunds affected by coronavirus?
No, credit card refunds will not necessarily be impacted by the coronavirus outbreak. In fact, any transactions you’ve made using your credit card that are affected by coronavirus will likely be better protected.
While most event organisers and operators are offering credit or refunds for events or services that have been cancelled or postponed due to coronavirus, some may be refusing to do so. In these situations, your credit card company can offer additional protections.
You should always try to contact the vendor or organiser directly before trying to pursue a refund through your credit card company.
If you’re been denied a refund for a product or event affected by coronavirus, you should contact your credit card provider directly and explain the situation to them in detail. For transactions between £100 and £30,000, your card company is jointly liable for any breach of contract (such as an event being cancelled) and can claim the money back on your behalf.
Types of transactions where you could get a credit card refund due to coronavirus
The coronavirus pandemic has had a huge affect on the hospitality and events industry, and will continue to do so for the foreseeable future.
Here are some of the situations where you could be eligible for a credit card refund if your transaction has been affected by coronavirus:
Ticketed events. Many events and attractions have been cancelled, closed or postponed due to coronavirus. This includes sporting events, cinema screenings, museums, live music and other performances. If the organiser is refusing to refund you for a cancelled or postponed event, you are likely to be able to claim a refund through your credit card provider.
Cancelled flights. While most airlines may offer credit for flights cancelled due to coronavirus, you may prefer to get a refund. Your credit card company should be able to get a charge back on any flights that have been cancelled. If, like Flybe, the airline you booked with goes bust and you’re not offered a refund or suitable alternative, then you could seek a refund through your credit card provider.
Hotel or travel bookings. While many hotels are offering free cancellations, or waiving cancellation fees, you may find some are refusing to refund your booking if it’s at short notice, or there are no travel restrictions in the region. If you’d like to cancel an upcoming reservation due to coronavirus, your credit card company should be able to perform a chargeback on your behalf.
Undelivered or faulty products. If you bought something at an online retailer such as Amazon, but which hasn’t been delivered due to coronavirus, you should be able to request a refund through your credit card company. This would also apply to any products that is faulty or not as the seller described it.
Additionally, some credit card companies provide inclusive travel insurance with their cards, and this may cover you in the event of changes to your travel itinerary or unexpected cancellations.
Please note that your ability to claim a refund may be affected if you make the decision to not attend an event that is still going ahead, but it’s still worth checking with your credit card company to see if you will be covered.
How long will a credit card refund take during coronavirus?
As is understandable, many organisers and retailers are going to be inundated with refund requests, and may take more time than usual to respond to you. This may also be true of your credit card company.
You should expect that it may take even longer than usual for a credit card refund to be processed, especially if it’s for a contested transaction.
As mentioned above, before requesting a chargeback through your credit card company, it’s important to contact the seller or organiser first to establish their refund policy. Chances are most will be offering refunds on events or products affected by coronavirus. Only after you have heard back from the vendor and been refused a refund should you request a chargeback through your credit card company.
When might I need to use section 75?
If the retailer has gone bust, leaving you without goods already paid for.
If you receive an item that is not as described and the retailer rejects your refund request.
If you receive an item that is faulty or not fit for purpose and the retailer rejects your refund request.
How do I get a credit card refund?
The best course of action for your transaction dispute process will depend on whether or not the merchant is still trading.
If the retailer is no longer trading:
Go straight to the credit card provider – either call them and say you would like to make a claim under section 75 (they will usually send you a form to fill in) or log in to your internet banking locate the transaction in your account history and look for an option to “query this transaction” or similar.
If the retailer has entered administration after you have paid for goods but before their arrival, you can still make a claim, based on an anticipated failure of the company to deliver.
If you are making a claim because of a fault, the credit card company might ask you to arrange an independent report to verify the fault. If the fault is confirmed, it should refund you the cost of this as well.
If the retailer is still trading:
You don’t need to go to the card provider straight away if the retailer is still trading – first, request a refund from the retailer in the usual way but stating that you are making a claim “under section 75 of the Consumer Credit Act”.
It’s only if this is declined or the retailer doesn’t respond that you should contact the credit card provider.
If you have no luck going directly to the retailer, write to the credit card provider giving as many details as possible about the purchase: what you bought, when you bought it, from which retailer. Give receipts if possible and details of what went wrong, such as your goods didn’t arrive or were not as described. Also state that you have contacted the retailer and give details of its reply.
If this refund claim is rejected by the credit card provider and you think the decision is unfair, you could make a claim with the Financial Ombudsman Service.
It’s important to note that time restrictions can apply to certain types of claim – in other words you may have a limited window in which it is possible to initiate the refund process (often 120 days). Although your card issuer may not be legally obliged to offer a refund after this point, depending on its policies, it may still consider your claim.
What is (and isn’t) covered by section 75
Items priced at more than £100, even if you paid for only some of it on credit card. So if you paid £30 on credit card but the item was for sale at £150, you are entitled to a refund of the full amount.
Purchases in the last six years.
Purchases made abroad or goods from abroad.
Debit cards, charge cards, company credit cards and store cards.
Items priced at less than £100 or more than £30,000.
Purchases made via a third party, such as Groupon, PayPal or Amazon. The relationship has to be direct between the card holder and the retailer.
Multiple items. The purchase has to be of a single item. So if you buy five festival tickets in one go and the event is cancelled because the organiser goes bust, you may only be entitled to a refund for one.
If the purchase was made by an additional cardholder (such as your husband or wife) on your card, but was for someone else’s benefit, ie. a gift for a friend.
Credit card refund case studies
You bought flight tickets and the airline goes bust. You should be entitled to a refund from the credit card provider for the flights.
You buy a car for £8,000 and put the £350 deposit on your credit card. You are covered for the whole amount.
You buy a kitchen on credit but the doors are wobbly. You make a claim to the retailer but it refuses your request, saying the wobbly doors have been caused by your misuse. You make a claim to the credit card provider, which asks you to arrange an independent report. The report states that the wobbly doors are a manufacturers fault and the credit card provider agrees to issue you a refund.
Frequently asked questions
With debit cards, providers can arrange something called a “chargeback”, where they reverse the payment made to the retailer. This isn’t a legal requirement, but is common practice for big card processors such as Visa and Mastercard. However there’s usually a time limit of four months for chargeback requests, so they are a bit less reliable than section 75 requests.
The credit card provider will make its own decision about whether the item is not as described or faulty based on all of the available information, so it may disagree with the retailer and support your judgment. Either you or the provider can suggest an independent report to verify the fault.
You could still benefit from the chargeback process, explained above, if you bought an item costing less than £100 on a credit card.
There’s no set time limit on how long a credit card provider has to make the refund.
If you think the decision is unfair and have evidence to support your case, you may take it to the Financial Ombudsman Service.
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