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When you use your credit card for transactions, you qualify for chargeback rights should merchants not deliver the goods and services.
This applies to certain circumstances, such as flights cancelled because of the Covid-19 coronavirus, and is evaluated in line with the Visa and MasterCard chargeback rules.
However, customers should be very careful when voluntarily cancelling their trips, as they may lose their ability to claim.
The following examples have been provided by FNB, but apply to any credit card transaction:
1. A cardholder purchases goods/services and then the merchant cancels the goods/services. For example, if an airline cancels a flight due to low demand, does the customer have a dispute right?
Yes, there is a dispute right when goods/services are not provided for any reason, including bankruptcy or other circumstances.
The exception is cancellations due to government prohibition as government regulation and/or law supersedes association rules on dispute rights. Customers are advised to try to resolve this with the merchant before initiating a dispute.
2. A cardholder has tickets for an event that was cancelled and rescheduled. However, the cardholder does not want to attend the event on the alternative date chosen by the merchant. Does the cardholder have dispute rights?
Yes. The merchant is responsible for providing the purchased service on the agreed upon date. Therefore, the cardholder is not required to accept an alternative date. However, if the reason for the cancellation of the event was due to a government-imposed prohibition, then the cardholder would not have a right to dispute the transaction.
Government regulation and/or law supersedes association rules on dispute rights. The cardholder should work directly with the merchant to resolve the dispute.
3. A cardholder purchased goods/services and the merchant cancels the goods or services due to a government prohibition. For example, an airline cancels a flight because government closed the border. Does the customer have dispute rights?
No, if the merchant has not provided the service due to a government-imposed prohibition, the cardholder does not have a dispute right.
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Government regulation and/or law supersedes association rules on dispute rights. The cardholder should work directly with the merchant to resolve the dispute.
4. A cardholder purchased services, but chose not to use them due to the cardholder’s concerns related to Covid-19. For example, the cardholder chooses not to travel on a scheduled flight and cancels their ticket. Does the cardholder have dispute rights?
No, the cardholder does not have dispute rights if they chose not to use the services made available by a merchant. The merchant has fulfilled their obligations to provide the service and has properly disclosed the terms and conditions. This also applies to non-airline merchants, such as hotels and other venues that kept their obligations to deliver services.
The cardholder should work directly with the merchant to resolve the dispute.
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