Credit card processing usually takes place in two stages. The first is authorization and the second is settlement. This two-stage process may provide a window in which to cancel a transaction without it affecting your balance. In other situations, cancellation is still possible but might require that you either wait for a refund or take other steps.
Cancelling Immediately or Near Immediately
A cashier or customer service representative may be able to void an in-person sale and allow you to cancel a transaction for which you've changed your mind. In some cases the void can happen while you're still at the cash register, and in others you will have to visit the customer service desk before leaving the store.
For an online transaction, check the merchant's cancellation policy. Some provide a small window in which you can cancel a pending transaction. In this situation, an order may show as cancelled but the transaction reversal might not post immediately.
Cancelling Problem Transactions
In some cases you might want to cancel a purchase you are unsatisfied with, but the merchant will not authorize a return. Or, you might want to cancel a purchase that is erroneous or fraudulent. These types of cancellation procedures fall under protections outlined in the Fair Credit Billing Act. The Federal Trade Commission recommends that you follow specific procedures to dispute and cancel an entire transaction or limit your losses to no more than $50.
Procedures for Disputing a Credit Card Transaction
- Write a letter that includes your name, the account number, the date and amount of the disputed charge and the reason or reasons why you are disputing the charge. For example, explain why you are dissatisfied or highlight a billing error. Include supporting documents such as photographs or a copy of the bill.
- Send the letter by certified mail, with a return receipt request within 60 days of the postmark on the credit card bill.
Procedures for Fraudulent Transactions
- Contact the issuing bank or merchant by telephone within two business days and let them know you suspect someone of fraudulently using your credit card. Provide details about the disputed transaction, such as the amount, date and merchant.
- Send a follow-up letter via certified mail with a return receipt request to confirm that you reported the fraudulent transaction or transactions.