Claiming a refund from your credit card company: the grey areas

We all know that many people have been having trouble getting refunds for shopping and, of course, holidays over the course of the Covid-19 pandemic – even if they’re entitled to it. So it’s likely you’ll have seen lots of promotion and coverage telling you that if you paid for your goods and services by credit card, you may be able to claim your refund from to your credit card company.

This is by and large true and many consumers will by now have heard of the legendary piece of consumer protection called Section 75 (‘of the Consumer Credit Act 1974’ if you want its full title). This handy piece of law means that, in essence, if you pay by credit card for any goods or services costing more than £100 (and less than £30,000) then your credit card provider is jointly liable alongside the company you purchased from. If you want to know the details behind Section 75 and how (and why) you can claim a refund through your credit card, then take a look at our full guide. 

Resolver has seen many claims over the past year made by people to their credit card provider to get a refund because the company they purchased from isn’t playing ball. It’ll come as no surprise that a number of these concerned refund claims for cancelled flights and holidays. And credit card providers are becoming more obliging, though it pays to have the evidence that you’ve tried to get your money back from the company you purchased from directly.

But, as with all laws, there can be grey areas and it’s important to know what these are to make sure you’re fully covered if you are tempted by that item online or are looking to book that much sought after holiday. Here are a few trickier areas that mean you may not be entitled to get your money back by claiming from your credit card provider – or happily, where you may not realise you are covered.

If you paid using a payment service such as Paypal

Often you can’t claim if you use PayPal, but it’s not always a straight ‘no’ to being able to claim. If you’ve made your payment via Paypal (or another platform), then as long as the retailer has a ‘commercial entity agreement’ with that provider, where the money paid goes directly to the seller, you can pursue a claim under Section 75 if your goods don’t turn up or the seller is in breach of contract. 

However, it’s worth bearing in mind that these services usually have their own route to making a claim to get your money back, so do check these to see if it applies or would be the simplest route. If you want to be certain of the ability to claim under Section 75, look for ways to pay the seller directly with your credit card.

If you have only paid a deposit for an item or service

Good news – assuming the total value of your purchase falls within the Section 75 criteria then you don’t have to have paid the full cost on your credit card. 

So if you only paid the deposit for that package holiday on your credit card but, for example, the balance in cash, then you can make a claim with your credit card company for the total cost. 

If you have paid for a number of items in a single transaction

This is perhaps one of the more confusing areas of Section 75. What if you purchased a number of items under one transaction (say you filled that online shopping bag) – but you have an issue with just one or two of them? Sadly, in cases like this, you won’t be able to make a claim for a refund to your credit card company (unless the items in question cost more than £100 each). The same goes for a total order of more than £100 that perhaps didn’t arrive, if the goods themselves individually cost less than £100. 

However, there may be situations where you could argue that two ‘purchases’ can count as a single transaction – for example if you paid for outbound and return flights together and only one was cancelled. In this case, despite Section 75 not strictly applying, you can make the case (assuming the total cost was more than £100 for both) you would have needed both ‘purchases’ – as in one is useless without the other. So it’s worth contacting your credit card company to attempt to claim for a refund in this instance if your airline is not honouring it, though be aware that this won’t guarantee you will be successful and making a claim through ‘chargeback’ may be more appropriate.

If you bought goods or services from a ‘third party’ provider or marketplace

It’s becoming more common to book holidays through ‘third party’ online marketplaces rather than directly with a travel agent, or to buy a number of things online not directly from a retailer. If this is you, and you want to claim a refund from your credit card provider because the place you bought it from is not coughing up, then sadly, you may not be able to.

You can’t make a Section 75 claim if you didn’t buy directly from the retailer or service provider. So if you bought items from eBay, tickets from a ticket agency rather than directly from a box office or a holiday from a third party travel site, in the main you won’t be covered. But there are limited exceptions – some travel sites are seen as an agent for the supplier of the travel service and payment is taken in this manner (some hotel booking sites for example) and in these cases you’re more likely to be able to make a claim. 

So what if I can’t claim on my credit card Section 75?

These are a few common examples of where it can be confusing to know if you can or can’t claim a refund from your credit card company. If Section 75 doesn’t apply to your purchase then you may be able to use a process called ‘chargeback’ to make a claim. Unlike Section 75 this isn’t legal consumer protection, but a layer of protection provided by banks (and credit card providers) as another avenue to make a claim if you’re unable to get your money back from a retailer or service provider. 

Examples of where chargeback can be a useful ‘fallback’ include:

• If your purchase was worth less than £100; or
• If you paid by debit card rather than credit card.

Before attempting a chargeback claim, definitely try and obtain a refund directly from the company you purchased from – and keep all evidence that you have done this. You should also be aware that you usually can’t make a chargeback claim more than 120 days after your purchase.

Let us know if you have tried to make a claim using Section 75 to your credit card provider and have been unsuccessful – contact contributions@resolvergroup.com to share your story. But if you think you’re entitled to raise a claim you can do so using Resolver for free. Take advantage of our templates and online service to make sure you get the most effective claim – or even if you have to make a complaint about how your Section 75 claim was handled.