What rights does a mechant haveregarding credit card chargebacks?

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What rights does a mechant haveregarding credit card chargebacks?

Merchant A in PAreleased over $6000 goods after 2 credit card transactions were approved on-line. However, the payments were rejected later by the payment company in CA as chargeback by the reason of card fraud; the authorized account holder claims that he/she did not engage or authorize the transactions. What action can merchant A take to protect its right against chargeback, or to get the money back? Is there a statue of limitation if the transaction occurred 3 year ago?

Asked on July 26, 2011 Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The merchant needs to first loom at his or her agreement with the credit card company for use of its credit card and related contested charges where merchandise is acquired, but not paid for in the end due to theft claims by the rightful owner of the credit card. Potentially, the agreement will set forth some mechanism to answer your question.

Another more practical answer is to have business insurance for a situation where a credit card charge is invalidated due to theft and the merchant ends up losing the product sold. If the actual purchase was fraudulent and the criminals are caught, the merchant can always file suit. However, getting money out of a criminal is going to be difficult if not impossible.


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