Deadline for requesting a refund for a credit card transaction

Topic: Abuse and fraud Case number: 2023/11

The client submitted a refund request (“charge-back request”) to his bank in connection with goods that he had ordered online and paid for with his credit card. He claimed that he had never received the goods and that none of his attempts to contact the retailer had been successful. The bank rejected the request and claimed that, according to the card conditions, it had been submitted too late . The client took the view that the internal rules of the credit card organization allowed him to submit an application for a refund even after the deadline claimed by the bank. In its statement to the Ombudsman, the bank explained in detail why the client’s refund request was to be considered late in accordance with the internal rules of the credit card organization. Nevertheless, the bank was prepared to reimburse the client for the disputed transaction as a gesture of goodwill.

The client used his credit card to order goods online with a total value of CHF 140. After waiting almost a month for the goods to be delivered, the client contacted the retailer several times by email and asked him to deliver the goods. However, the retailer did not respond to the client’s requests. More than four months after the transaction, the client contacted the bank for the first time and requested a refund of the purchase amount. However, the bank refused his request and did not initiate a so-called “charge-back procedure”. More detailed explanations of this procedure can be found in case 8 in our Annual Report 2021 (2021/08). Both in its first response and in a second statement to the client, the bank claimed that the client had submitted his application too late, well after the 30-day deadline within which it should have been submitted based on the applicable card conditions.

As the client was not satisfied with the bank’s decision, he turned to the Ombudsman with a request for mediation. The client claimed that, to his knowledge, the internal rules of the credit card organizations allow refund requests to be submitted well beyond the deadline claimed by the bank if a merchant does not deliver the goods paid for with the card. In his view it was therefore wrong for the bank to reject his application for reimbursement.

The Ombudsman intervened with the bank, confronted it with the client’s argument and asked it to look into the case again. In its reply to the Ombudsman, the bank explained its position in detail. It confirmed the principle that refund requests must be submitted within 30 days of the date on which the credit card transaction was charged to the client. However, the bank agreed with the client insofar as it recognized that exceptions to this principle were possible. According to the internal guidelines of the credit card network, a refund request relating to undelivered goods can be made within a maximum of 120 days.

However, in order for such a request to be processed, it must be accompanied by a copy of the order confirmation or, if this is not available, a detailed description of the goods and a document showing that the client contacted the recipient of the transaction and tried to find a solution for the delivery of the goods.

According to the bank, the client had enclosed all the necessary documents with his application. Nevertheless, the application could not be processed because it was submitted too late, even taking into account the extended deadline. In the present case, the information provided by the client lacked any indication that the retailer had complied with the essential obligations for the delivery process stated on its website, i.e. to ship the goods within 48 hours and to provide a tracking link within a maximum of 72 hours. In addition, there was no indication in the file that the parties had agreed a new delivery deadline. On the contrary, the steps the client had taken towards the merchant had not even enabled him to establish contact .

In such a situation, the internal rules of the credit card organization stipulate that the 120-day period is to be calculated from the date on which the disputed payment was made. In this case, this deadline had been exceeded as the client had only submitted his refund request 135 days after the disputed payment.

Nevertheless, the bank decided to credit the client’s credit card account with the disputed amount of CHF 140. This was done as a gesture of goodwill, without acknowledging any legal obligation and on balance of all claims arising from the dispute submitted to the Ombudsman. The Ombudsman informed the client of the bank’s positive decision and explained the underlying arguments.