What are card chargebacks and purchase protections, and how do they work?

May 2, 2020

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Refunds are a hot topic in the travel world right now. The coronavirus pandemic has caused airlines to slash schedules as they navigate travel bans, transit restrictions and reduced demand.

We’ve written before about your rights when it comes to cancelled flights in this situation. When an airline cancels your flight, you are legally entitled to a full refund. When you instead choose to cancel your booking before an airline does, you are not entitled to a refund unless the terms and conditions of your ticket allow it, for example, if you booked a more expensive fully flexible/refundable ticket.

Some travellers have experienced difficulty in obtaining a refund when an airline has cancelled their flight. For example, last week, British Airways notified me by email that it had cancelled an upcoming flight next month that I had booked to Kuala Lumpur (KUL). The airline provided instructions on how to claim a Future Travel Voucher online for the value of the cancelled flight but did not give me the option to receive a refund online, nor even advise me I was entitled to this, despite the airline having a legal obligation to provide this to me.

I did manage to obtain a refund by calling British Airways after waiting for around 20 minutes on hold, I got through to a very helpful employee who was happy to process the refund over the phone. But British Airways should have made this easier. Some airlines are truly playing hardball, refusing to issue refunds at all.

While it’s a last resort, if you’ve tried everything else to obtain your refund, you may wish to investigate your purchase or chargeback protections. Here’s how they work.

(Photo by Isabelle Raphael / The Points Guy)
(Photo by Isabelle Raphael / The Points Guy)


Say you purchase something on:

  • A debit card (like a fee-free travel debit card); or
  • A prepaid Visa or Mastercard card (such as one you received as a Christmas gift); or
  • A purchase for less than £100 on a credit card (for purchases over £100 choose the s75 refund protections below as they are more generous for consumers).

In the above examples, if the goods or service were faulty or not delivered (such as a cancelled flight), or the retailer goes out of business, you’re in luck. The chargeback scheme agreed to by Visa, Mastercard and American Express can refund you cost of the goods or service. This is not a legal requirement — it’s something these card issuers offer individually.

You must apply for this refund within 120 days of making the purchase or when you expected to receive the goods or service. This means that though you may purchase a flight more than 120 days in advance of the departure date, you are covered if you did not receive what you had paid for (i.e. the flight was cancelled) at the time you expected to receive it.

Section 75 refunds

Section 75 of the Consumer Credit Act 1974 in the U.K. provides you with refund protection where you pay for an item or service costing more than £100 but less than £30,000 on a credit card only. You do not have to pay for the entire amount on a credit card, provided the total cost is between £100.01 and £30,000 — in other words, you can split the cost across multiple payment methods and still be covered.

If your purchase fits the above criteria and you do not receive what you paid for (such as the flight you paid for is no longer operating), or the retailer (i.e. airline) you purchased from goes out of business, you can claim back the cost from your credit card provider.

The credit card provider may also ask for documentation as evidence of both the purchase and your efforts to seek a refund from the retailer.

You can seek an S75 refund even if you’ve closed the credit card since making the purchase.  There is no time limit for making a claim after the purchase.

Frequently asked questions

What is the difference between a chargeback and an S75 refund?

Section 75 refunds only apply to purchases made on a credit card and for more than £100. Chargebacks are for purchases made on debit or prepaid cards (any value), or credit card purchases less than £100 only.

Can I just claim this rather than trying to get a refund from the retailer?

No. This is not a short-cut for normal refund processes. You should first seek a refund from the retailer (i.e airline). Some credit card providers may not be willing to commence an S75 refund or chargeback claim unless you have exhausted the normal refund process through the retailer first.

Are there other refund protections offered by card issuers?

Yes, for example, American Express offers an additional Purchase Protection where it will provide a 90-day refund period for eligible purchases regardless of what the retailer’s standard refund period is.

This would be useful for a faulty clothing item but not a cancelled flight. Note this is in addition to your chargeback and S75 refund rights, not instead of.

How quickly will I get my refund?

This will differ from card issuer to card issuer, and from retailer to retailer. There is no formal timeframe and no card issuer will guarantee to have your refund within a set time limit. Right now, with all the coronavirus interruptions to normal business processes, you can expect successful claims to take quite some time — perhaps well over a month. It might be quicker to sit on hold phoning the airline instead.

How do I start either process?

Call your card provider — the number on the back of the card you used to pay for it is a good place to start. Say you would like to dispute a transaction, perhaps mention chargeback or Section 75 refund depending on which scheme your purchase falls within.

What happens if my claim is not approved?

If your claim is rejected, you should be provided with a reason from your credit card provider within eight weeks of lodging the claim. If you still believe you are entitled to a refund, you can contact the Financial Ombudsman to make a formal complaint.

Bottom line

The chargeback and Section 75 protections are great benefits for consumers, allowing them to use their debit and credit cards with confidence about their rights if something goes wrong.

Do try all you can to seek the refund from the retailer first — neither scheme is designed as a shortcut around the normal refund processes. If this fails, there’s a great extra layer of protection for you.

Featured image by Gettys Images

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