There are all kinds of benefits to making purchases with credit cards over other forms of payment — you can earn rewards, you get fraud protection, you can dispute charges, and with some cards you even get purchase protection and other travel coverage.
In this post I wanted to specifically address something I’ve heard over and over, in hopes of managing expectations, if nothing else.
“Just dispute the charge”
This is an unprecedented time globally, in particular for the travel industry, given that it has more or less come to a standstill.
We’ve seen some travel providers offer generous change and cancellation policies, and we’ve seen other travel providers, well… not do that.
I’ve constantly heard people throw around the concept of disputing a credit card charge if you’re not getting what you want. I even recommended that, with caveats, in a post about how to cancel flights during COVID-19.
I have seen people mention this in just about every context imaginable, and I do think there’s value in managing expectations.
When is a credit card dispute appropriate?
Credit card companies are rather vague when it comes to the circumstances under which they recommend filing a dispute for a purchase. There are a few things to be aware of:
- There’s a difference between a purchase you should mark as fraud, and one you should dispute; fraudulent purchases include completely unauthorized ones, with companies you don’t do business with, rather than maybe a recurring payment with a company you do business with (which you would dispute)
- You’re only supposed to dispute a purchase after you’ve reached out to the merchant to resolve the issue, and after you’ve come to a dead-end there
- You often have only 60 days from when the purchase was made to dispute a charge
- Think of a credit card company more as a common sense court, rather than an assistant manager at an Olive Garden; in other words, you don’t dispute a charge because the pasta wasn’t very good, or because the service could have been friendlier, but rather because you didn’t get what you explicitly paid for
To give some examples of when a credit card dispute is appropriate:
- If you didn’t receive what you paid for
- If the item you received is defective
- If you didn’t authorize a purchase
- If you were double charged
- If you were charged a recurring fee after cancelling
- If you were charged the wrong amount
Expect credit card companies to crack down on travel disputes
Now on to my advice — if you have a travel issue it’s totally fine to file a dispute with your credit card, though don’t necessarily expect it to be successful. I can’t even imagine the extent to which credit card companies are being overwhelmed with travel disputes, and they’re not just going to approve all of them.
Even looking at the Chase page for disputing charges, they added this special section:
“If your dispute is related to travel, we recommend that you start with your travel provider because many airlines and hotels are being flexible about impacted areas. If they can’t help, submit a dispute online and we’ll work with you to try and find you a solution.”
I’ve also received several comments and questions from readers the past couple of days who are frustrated that their disputes have been denied. For example, reader Jasper just left the following comment on a post:
I actually tried a charge back after a hotel offered me a (likely useless) voucher after they cancelled my reservation. Amex flatly refused the charge back because “the hotel offered an alternative.”
Historically credit card companies have sided with consumers by default for disputes (with some issuers being more generous than others), though personally I would expect that to change for the time being, especially with travel brands.
The reality is that:
- Even for credit card companies, liaising between consumers and travel brands is going to be challenging, since it can be hard to even get in touch with many travel brands
- With many travel brands issuing vouchers rather than refunds, this further complicates the situation, since disputing a charge may lead to you getting a refund and a voucher
I’ll take it a step further — I wouldn’t be surprised to see credit card companies essentially not take “sides” when it comes to travel brands offering vouchers rather than cash back, arguing that they’re offering some alternative.
I get that this is super frustrating
Trust me, I’m in the same boat as everyone else. In many cases we’re left without options, and feel like a credit card dispute is the only option.
For example, last week I was supposed to go to Peru, and had booked two intra-Peru flights on LATAM. The flights ended up cancelling, so I’ve been trying to get a refund or rebook them, but I can’t get through to anyone at LATAM.
Heck, almost every day I still get a text saying that I’ve been rebooked the next day, which makes me wonder just how many of these flights are being cancelled. But there’s no way I can get through to anyone.
The way I saw it, the only option I had was a credit card dispute. Do I expect it to be successful? No, maybe not. But what else is one supposed to do?
There’s nothing wrong with trying a credit card dispute right now, but I would expect credit card companies to be significantly less generous than usual. I can’t even imagine the exponential increase they’ve seen in disputes, and they’re not just going to approve disputes by default anymore.
If you’ve filed a credit card dispute for a travel purchase during the coronavirus pandemic, how did it work out for you?