Is it acceptable to use a bank's "dispute a charge" feature if restaurant wouldn't give refund?

Question

I ordered some food at a popular fast food chain, through drive through. When I arrived at my destination, I found my order was wrong, plus the food was very stale and cold. I paid for a rather extensive breakfast ($11) and I was instead given food probably left out over night, which isn't even on the menu at 7 am.

I went back to the store and asked for a refund from the manager. Due to COVID, I waited outside. He asked for my credit card, then came with a receipt with negative signs after the prices and said I was refunded. Update: I showed my receipt to the manager of another store in the same chain, confirmed the receipt was bogus. The receipt was for a cash refund, though the manager said he put the money back to my card.

Two weeks later, my bank still shows I was charged for the meal and never refunded. Note that the initial bank charge appeared on my card immediately, I even got a text alert for it. Is this an appropriate situation in which to use my credit card's "dispute charge" feature? Or is that a misuse of this feature?

Answer 1

tl;dr: Based on your recent update that the receipt says cash refund, which you didn't receive, if it were me, I'd just dispute it now and be done with it.

Note: The previous version of this answer is based on the refund being issued to a credit card, which no longer applies to this specific question. I'm leaving it for future readers that may be interested in information about a refund to a CC.

Under normal circumstances: it's best to start with the merchant, if possible. I would recommend that you call the restaurant first to see if they are able to assist. Since this is a fast food chain, they may redirect you to their corporate accounting office rather than the specific location you went to. If you don't get anywhere with them, then yes, this is a valid use of the feature.

If you still have the receipt showing the refund, it would be helpful in case they fight the dispute, but most likely they won't challenge it and you'll simply get refunded right away.

Older Update that is no longer relevant: based on your edit that you think the refund receipt might be fake: I would wait and see if the refund ever appears. If it never does, I would consider contacting the owner to let them know this happened. Maybe there's a simple explanation, but if the manager really was trying to pull a fast one, I assume the owner would want to know, since they've likely done it before.

General Note: it's common for credit card refunds to take weeks to show up. You have plenty of time to dispute the charge (at least 60 days, possibly longer), so you could even wait another week or two if you want to be sure the refund isn't going to show up before disputing it.

Answer 2

Yes, dispute the charge.

A dispute usually is open by the credit card for a period such as 30 days; if the refund is processed within that period, the dispute is moot and you are made whole. If the credit doesn't appear in 30 days it will come down to the credit card policy which side to take; you have documentation showing the business' intent and from the narrative are not trying to take advantage of them. Either they credit you and you are made whole, or they decide not to, and you are in the same position as now, but with no regrets for not trying.

Answer 3

I now realize the manager's refund to my card was completely fake: it says the refund total on a line saying "CASH: amount", no credit card line is listed.

In addition to what others have already said, this is potentially an embezzlement scheme. The (ostensible) manager enters a cash refund in the register, but instead of giving you the cash, puts it in his or her pocket. Because the bogus transaction was entered, the register will balance at the end of the day even if some cash was stolen.

You might also find the owner of the store will be interested in your story.

Answer 4

Is this an appropriate situation in which to use my credit card's "dispute charge" feature? Or is that a misuse of this feature?

Yes, this is a legitimate use of this feature.

Call your bank and ask to be connected to the dispute department. Explain your story and they will gladly guide you on how to best proceed.

They might very well say "Oh we see a refund being processed, give it a few more days." or they could say "We will gladly issue a chargeback if that is what you wish to do."

Even if you've paid your bill you can request a chargeback for up to 90 days from the date of service; this could vary from bank to bank. I say "date of service" because if you buy plane tickets then it's 90 days from the scheduled flight date, not from the date of purchase.

Answer 5

You didn't specify the country, so your mileage might vary.

Every time I opened a dispute through a Russian bank, the first thing the bank always did was contact the vendor and ask for their version of the story.

The bank person would see all your transaction history with that vendor.

If the vendor did issue the refund, they would tell the bank so, the bank would confirm that and close the dispute. No harm done for anyone.

If they didn't, the bank would see that too, and probably resolve the dispute in your favor, especially over the sum of $11, whatever in means in your country.

Or, they could ask you to try and settle the dispute with the merchant first. In this case, I usually send an email to [email protected] that you can find on the corporate web page and CC the bank person. This email would end up in the decision making person's inbox anyway. But this way, it would come from the bank straight into the inbox they read, and get much more attention.

Answer 6

Dispute it is the right answer, because if the merchant does/did actually process the refund, the onus will be on them to prove that they did. Provide your receipt as evidence to the issuing financial institution of the card. They have people that specialize in recovering funds from merchants. They will know exactly how to argue with the merchant on your behalf, and how to get the refund to actually show up.

I would try to resolve with the merchant, but if they didn't provide you with a refund when they said that they did, I would not try to go it alone.

Answer 7

Yes, of course. What you describe seems like a text-book case of why banks have “dispute a charge” features.

Here in the UK, that shouldn't be necessary… you wouldn't need half those details to win the legal argument.

Yet, however clearly you're going to win if you take the restaurant to court to get your refund, your bank's “dispute a charge” service will be a lot cheaper, simpler and quicker.