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Have you heard this story before? You decide to do some holiday shopping online, but when you get your
gifts in the mail, they turn out to be poor imitations of what the seller promised you.
Think you're out of luck? Think again. In many cases, you can get some or all of your money refunded if
you paid for your purchase using a credit card.
Under the Fair Credit Billing Act, buyers who use a credit card have the right to refuse payment on damaged
or shoddy goods. But many credit card companies offer additional coverage that protects consumers if
their merchandise is damaged or stolen. This is called purchase protection.
Credit card agencies frequently offer this kind of coverage for free as a way to retain loyal customers in
a competitive market. Some credit card companies even refund you if you lose your purchase, while others
will also extend your warranty on items such as electronics.
The terms and coverage of most purchase protection agreements varies from credit card to credit card, but
usually involves a full or partial refund within 90 days of the purchase. In many cases the goods must be
worth at least $50 and not more than $1,000 and must be made in your home state or within 100 miles of
your home. Business and Premium cards, like Gold or Platinum, usually have higher limits - some as high as
$50,000.
Most credit card companies may waive some of those conditions to make their customers especially loyal
customers happy, but you should always check the terms of your purchase protection carefully or call your
credit card's customer service line to clarify what is covered and what isn't.
By law however, you should first try to resolve the dispute with the vendor who sold you the product,
rather than take your complaint directly to your credit card company. You may get an apologetic merchant
who is willing to extend to you some free items to keep your business.
If you are asking for a refund on a damaged item, you will usually need to produce the original receipt.
You will often need a police report or fire loss report to claim items that were stolen or destroyed by
fire. If you are asking for a refund on a purchase that needs to be repaired, you should include cost of
the repair. It is important to check with your credit card company to ascertain how they handle each case.
Certain credit card transactions are typically not covered by purchase protection, such as cash advances,
jewellery, pets, used goods and motor vehicles. If you want to take advantage of purchase protection,
consider using your credit card for big-ticket items such as electronics and airline tickets.
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