Difference between a Chargeback and Refund

A refund is money the merchant chooses to give back, usually after you ask them. A chargeback is a formal dispute you raise through your card provider, which then reverses the charge if your claim holds up, whether or not the merchant agrees. Start with a refund. Save the chargeback for when the merchant won't help or you never authorised the payment.

What is a chargeback?

A chargeback is a formal dispute of a card transaction, started by the cardholder. Your card's issuing bank is involved: the merchant is told that you dispute the charge, and the issuer reviews whether your claim is valid.

Common reasons for a chargeback

• Unauthorised transactions
• Goods or services not received
• Goods that arrived defective or not as described
• Billing errors

What is a refund?

A refund is the merchant returning your money voluntarily. It usually happens after you contact them about a problem with a purchase, and no card network dispute is involved.

Common reasons for a refund

• A damaged or defective product
• The wrong item
• Being overcharged
• Being unhappy with the product or service

Notice the overlap. A defective product can go either way. What decides it is whether the merchant is willing to fix the problem.

Which one should you use?

• Contact the merchant first. If you're unhappy with a purchase, ask them directly. Most merchants will sort it out, and a refund is usually the quicker route.
• Move to a chargeback if that fails. If the merchant ignores you or refuses, a chargeback may be the only option left.
• Go straight to a chargeback for fraud. If you don't recognise a transaction at all, there's no merchant conversation to have. Report it.

How to file a chargeback on your Based card

Based isn't the bank behind your card. We work with our card issuing partners and coordinate chargeback requests with them on your behalf, so you deal with us and we handle the back and forth.

1. Contact our support team with the details of the disputed transaction: date, amount and merchant name.
2. Send your evidence. Receipts, order confirmations, emails, and any messages with the merchant all help.
3. We pass it to the card issuer. We submit the request and follow it through the issuer's review.
4. Get the outcome. The transaction is either reversed or the request is declined.

Chargebacks aren't free to process. Chargeback fees and admin fees may be charged to you, so a refund from the merchant is usually the cheaper route when one is on offer.

Keep your messages with the merchant even if you think you won't need them. A dispute is much easier to win when you can show you tried to resolve it first.

Avoiding disputes in the first place

• Check your transactions often. Unauthorised charges are easier to deal with when you spot them early.
• Read the return policy before you buy, especially from a merchant you haven't used before.
• Raise problems quickly. Merchants are more willing to refund a recent order than one from months ago.

Paying with Apple Pay, Google Pay or a virtual card also cuts down on unauthorised charges in the first place. Why digital payments are safer explains how.