You purchase a product, but it doesn’t work or you don’t even get it. So you open a chargeback. How are banks able to just claw back the money you’ve sent?
In: Economics
My wife works for a credit card company, and is experienced on this process. When you report a fraud or request a charge back you will usually be credited the amount requested, and the vendor will be debited.
in some cases investigations will be initiated, and it is up to the vendor to prove the transaction is legitimate. The most common one usually occurs with tips added to transactions (bars and restaurant), and the CC company will request a copy of the receipt, but in most cases the vendor accepts the charge and they take the hit. At some point the CC companies will send a warning to the Vendor via the VISA or MC network with a threat of loss to the VISA network if the charge back/fraud reports hit a certain %.
Pro tip: if you are at a tourist destination or far away from home take a picture of the receipt with the tip added that can be provided to the CC company in case of a dispute.
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