Merchant Won’t Refund You? How to Do a Chargeback in Australia (Step by Step)

You paid. They didn’t deliver. Or they delivered something broken, fake, or nothing like the listing. You emailed. You called. You got an auto-reply, a “we’re looking into it”, then nothing. The company might not even exist anymore. And the money is just gone.

Except it isn’t. If you paid by credit card, debit card, or through a card-linked service, there’s a mechanism that pulls the money back from the merchant’s bank without their permission. It’s called a chargeback, and most people don’t use it because their bank doesn’t explain it. We will.

Your rights

• Chargeback under card scheme rules. Visa, Mastercard, and American Express all require issuing banks to reverse transactions where the cardholder has a valid dispute: goods or services not received, not as described, defective, duplicate charge, cancelled recurring payment, or fraud. Your bank must submit the chargeback if you have grounds; it’s not discretionary. Time limits are usually 120 days from the transaction or from when goods were due, sometimes longer for services with a future date.
• Consumer guarantees (ss 54–59 ACL). Goods must match description, be of acceptable quality, and fit for purpose. A merchant refusing a refund for a major failure is breaching the ACL, which is the basis for your chargeback reason code.
• Debit cards too. Chargebacks apply to Visa Debit and Debit Mastercard, not just credit. EFTPOS-only transactions have more limited rights, which is why paying with the credit function matters.
• Bank obligations. Under the ePayments Code and Banking Code of Practice, your bank must tell you about chargeback rights when you dispute a transaction, and must process a valid request. Refusing without proper reason is a complaint to AFCA.
• Buy-now-pay-later and PayPal. PayPal has its own buyer protection (180 days). Afterpay, Zip and others are now regulated credit providers and are AFCA members, so disputes can go there.

What to do right now

1. Try the merchant once, in writing, with a deadline. Banks want to see you attempted to resolve it. One email stating the problem, the ACL guarantee breached, and “refund within 7 days or I will initiate a chargeback” is enough.
2. Gather your proof. Order confirmation, listing screenshots, payment receipt, tracking info (or lack of it), photos of what arrived, and all correspondence.
3. Call your bank’s disputes team. Say: “I want to dispute a transaction and request a chargeback.” Don’t let the front-line staff talk you into “contacting the merchant” again. Ask for the disputes form or reference number.
4. Submit the dispute with the right reason. “Goods not received”, “Not as described / defective”, “Cancelled recurring”, “Duplicate”, or “Fraud / unauthorised”. Attach your evidence. Note the date; the bank should credit you provisionally or respond within about 30–45 days.
5. If the bank refuses, escalate. Lodge an IDR complaint with the bank, then AFCA.
6. Send a Letter of Demand to the merchant too. Particularly for amounts over a few hundred dollars, or if the chargeback window has passed. A formal letter citing the ACL, with a tribunal deadline, works on Australian merchants who thought you’d give up.

Chargeback reason codes, in plain English

Banks process chargebacks under scheme “reason codes”. Using the right language gets your dispute into the right queue and makes it harder to reject:

• Goods or services not received. You paid, the delivery date passed, nothing arrived. Evidence: order confirmation, promised delivery date, your follow-up emails.
• Not as described or defective. What arrived is materially different, counterfeit, or broken, and the merchant won’t fix or refund. Evidence: listing, photos, your complaint to the merchant, their refusal (or silence). Under scheme rules you usually need to have attempted to return the goods or offered to.
• Cancelled recurring transaction. You cancelled a subscription and were charged again. Evidence: cancellation confirmation or your cancellation email.
• Duplicate processing. Charged twice for the same purchase. Evidence: statement showing both.
• Credit not processed. The merchant agreed to refund and didn’t. Evidence: their refund confirmation.
• Fraud / unauthorised. You didn’t make the transaction at all. This goes through a different, faster process.

What happens next. The bank raises the chargeback with the merchant’s bank. The merchant has a window (typically 30–45 days) to respond with evidence. If they don’t, or their evidence is weak, the chargeback stands and your credit becomes permanent. If they contest it, the bank reviews both sides; you can submit further evidence. A merchant that “represents” with a bogus tracking number is common; ask the bank for the merchant’s evidence and rebut it.

Timing traps. The 120 days generally runs from the transaction date, but for pre-ordered goods or future services, from the date delivery was due. Tell the bank the expected delivery date explicitly so they apply the later start.

If the bank says “chargeback isn’t available”. Ask them to put that in writing with the reason. Then lodge an internal complaint and, if not resolved, AFCA.

Who to complain to

Your bank’s disputes team first, then the Australian Financial Complaints Authority (AFCA) if the bank won’t act. State fair trading and the ACCC for the merchant’s conduct. PayPal Resolution Centre for PayPal payments. For a merchant that’s gone into liquidation, lodge a proof of debt with the liquidator (ASIC’s register will list them), but do the chargeback first, because it’s faster and comes from the bank, not the insolvent company.

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