Credit Card Chargeback vs Refund: Timelines and Steps

A refund is when the merchant voluntarily returns your money. A chargeback is when your card issuer forcibly reverses the transaction through the card network (Visa, Mastercard, RuPay and others) after you raise a dispute. Always ask the merchant for a refund first; if it refuses, does not respond or the charge was fraudulent, dispute it with your bank quickly. Network deadlines are typically around 120 days for most reasons, while RBI's protection for unauthorised transactions is strongest if you report within three working days, as of October 2026.

Chargeback vs refund at a glance

When to use which

Ask for a refund first when:

• you returned a product or cancelled a booking within the merchant's policy;
• you were overcharged and the merchant acknowledges it;
• a duplicate charge was made and the merchant can see it.

Go straight to your bank when:

• you do not recognise the transaction (possible fraud);
• the merchant has shut down, stopped responding or refused a valid refund;
• the goods never arrived, or arrived badly damaged or not as described;
• the merchant promised a refund but it has not appeared after the stated time;
• a subscription kept charging you after you cancelled.

Two different rulebooks

1. Unauthorised (fraud) transactions: RBI's liability framework

If you did not make or authorise the transaction, RBI's customer liability framework applies. As of October 2026, the rules from RBI's 2017 framework are:

If the loss is due to the bank's own deficiency, you have zero liability regardless of when you report. If it is due to your negligence, such as sharing an OTP or PIN, you bear the loss until you report it. Banks are expected to give a shadow credit within 10 working days of your report and resolve the complaint within 90 days.

RBI issued revised directions on limiting customer liability in June 2026, which take effect from 1 January 2027 and extend protection to more types of fraudulent electronic transactions. Until then the framework above applies.

2. Merchant disputes: card network chargeback rules

For non-delivery, defective goods, cancelled services or billing errors, the card network's dispute rules decide the timelines. For Visa, most dispute reasons allow 120 days from the transaction processing date. For goods or services not received, the clock can start from the expected delivery date, subject to an outer limit. Mastercard and RuPay have their own, broadly similar, windows that vary by dispute reason. Your issuer files on your behalf, and it needs time to do so, so report as soon as you know there is a problem.

Worked example: a laptop that never arrived

Ananya buys a laptop online for ₹58,000 on her credit card on 10 July. Expected delivery is 20 July. It does not arrive, and the seller stops replying.

Timeline:

• 20 July: delivery date passes.
• 22 to 27 July: she emails the seller, keeps screenshots, and gets no reply.
• 28 July: she raises a dispute with her card issuer, attaching the order confirmation, tracking page and emails.
• Under Visa's "not received" rules, the outer window would run about 120 days from 20 July, until around 17 November. She is well within it.

What happens to her bill: Her statement generates on 25 July with the ₹58,000 charge, due 14 August. Her issuer places the disputed amount on hold and she pays the rest of her bill in full.

Why paying undisputed dues matters: If the issuer had not put the amount on hold and she paid nothing on the ₹58,000, interest at an illustrative 3.5% a month would add roughly:

₹58,000 × 3.5% = ₹2,030 for one month, plus 18% GST on the interest (₹2,030 × 0.18 = ₹365.40), about ₹2,395 in total.

That is before late fees. Most issuers reverse interest charged on a disputed amount if the dispute is decided in your favour, but get this confirmed in writing. You can model different scenarios with the credit card interest calculator, and our guide on how credit card interest works explains why interest can hit even purchases you later pay.

Outcome: The issuer gives a temporary credit while the network process runs. The seller does not respond, so the chargeback is decided in Ananya's favour and the credit becomes final.

How to file a chargeback: step by step

1. Contact the merchant first (unless it is fraud) and keep every email, chat and call reference.
2. For fraud, block the card immediately through the app, net banking or helpline, and report the transaction. Note the complaint number and time.
3. Raise the dispute with your issuer in writing through its app, net banking dispute form, email or phone banking. Give the transaction date, amount, merchant name and the reason.
4. Attach evidence: invoice, order confirmation, tracking, return receipt, cancellation confirmation, screenshots of the merchant's refusal, and photos for damaged goods.
5. Ask for the amount to be marked "under dispute" and confirm whether you need to pay it while the case runs.
6. Pay all undisputed dues by the due date to protect your credit score; see credit card billing cycle explained.
7. Respond quickly if the issuer asks for more documents. If the merchant contests the chargeback, you may be asked to rebut its evidence.
8. Track the outcome and check that any temporary credit becomes permanent.

For fraud, also report on the 1930 helpline or at cybercrime.gov.in. Our UPI scams guide lists the full recovery steps for electronic fraud.

Common reasons chargebacks fail

• Late reporting, beyond the network or issuer window.
• No attempt to contact the merchant for a merchant dispute.
• Weak evidence, such as no screenshots or proof of return.
• "Friendly fraud", where the cardholder or a family member actually made the purchase.
• Buyer's remorse: disliking a product that was delivered as described is not a valid dispute reason.
• Shared OTP or PIN: for fraud, customer negligence shifts liability to you.

Where to complain if the bank does not help

1. Escalate to the issuer's grievance redressal officer and principal nodal officer.
2. If there is no reply within 30 days or the reply is unsatisfactory, file with the RBI Integrated Ombudsman at cms.rbi.org.in.
3. For a dispute with the merchant itself, you can also approach the National Consumer Helpline or a consumer commission.

Key takeaways

• A refund comes from the merchant; a chargeback is a forced reversal through your card issuer and the card network.
• Try the merchant first for ordinary disputes; go to the bank immediately for fraud.
• For most Visa dispute reasons the window is 120 days, but report within days so the issuer has time to act.
• As of October 2026, reporting fraud within three working days gives zero liability; RBI's revised liability rules apply from 1 January 2027.
• Pay undisputed dues on time, keep evidence, and escalate to the RBI Ombudsman after 30 days if needed.