What Is a Chargeback in Canada?

A chargeback is a mechanism that allows your credit card issuer to reverse a transaction and return the funds to your account. It exists to protect consumers when a purchase goes wrong and the merchant will not fix the problem. This guide explains how the process works in Canada in plain language.

How a Chargeback Works

When you make a purchase with a credit card, money flows from your bank (the issuing bank) through the card network (Visa, Mastercard, or Amex) to the merchant's bank (the acquiring bank). A chargeback reverses this flow:

1. You file a dispute with your credit card issuer (the bank that issued your card).
2. Your bank reviews your claim and may issue a temporary credit to your account.
3. The card network notifies the merchant's bank, which debits the disputed amount from the merchant's account.
4. The merchant can contest the chargeback by submitting evidence (called representment).
5. Your bank makes a final decision based on the evidence from both sides.

The entire process typically takes 30 to 90 days. If the chargeback is resolved in your favour, the temporary credit becomes permanent.

Chargeback vs. Refund

These terms are often confused, but they are different processes:

Always try to get a refund directly from the merchant first. A chargeback should be your fallback when the merchant will not cooperate. For a step-by-step walkthrough, see our main guide on how to dispute a credit card charge in Canada.

Common Reasons for Chargebacks

• Fraud or unauthorized use. Someone used your card without permission.
• Goods not received. You paid but the product never arrived.
• Goods not as described. What arrived was significantly different from the listing.
• Duplicate charge. You were billed twice for one transaction.
• Cancelled subscription still billing. You cancelled but charges continued.
• Refund not processed. The merchant promised a refund that never appeared.

What You Need to File

To initiate a chargeback with your Canadian bank, you will typically need:

• Your credit card statement showing the disputed charge
• A written description of the problem
• Evidence supporting your claim (receipts, emails, photos)
• Proof that you tried to resolve with the merchant (if applicable)

A formal written dispute letter strengthens your case significantly. You can generate a customized letter tailored to your situation using our tool.

Chargeback Time Limits

Chargebacks must be filed within specific timeframes set by each card network. In Canada, the general deadlines are:

• Visa: 120 days from the transaction date or expected delivery date
• Mastercard: 120 days from the transaction date or expected delivery date
• American Express: 60 days from the statement date

Missing the deadline usually means you lose your right to file a chargeback through the card network. For a more detailed breakdown of how these deadlines work and exceptions that may apply, see our guide on credit card chargeback deadlines in Canada.

What Happens If the Merchant Contests

Merchants can fight a chargeback through a process called representment. They submit evidence proving the charge was valid, such as delivery confirmations, signed contracts, or communication records. Your bank then reviews both sides and makes a final decision. If the merchant prevails, the temporary credit is reversed. If you still disagree, you may have further escalation options through OBSI, ADRBO, or the FCAC.

Frequently Asked Questions

Disclaimer: This page is for informational purposes only. It is not legal advice.