I have US credit card that does not have PIN code. I tried to pay with it in Europe. Since merchant's PoS terminal could not accept signature and my card does not have PIN code they thought that transaction did not go through. I ended up paying in cash. 5 minutes later I showed them my online banking history and showed transaction in Pending state. They still refused to refund me because they did not see transaction at their end. Now transaction is settled and at least I think they should see it at their end.

Should I dispute this transaction with my credit card company or try to contact merchant again? What are pros and cons of each approach (e.g. impact on my credit score, credit card company will send a new card to me which would be hassle, would merchant be adversely impacted)?

  • 1
    "Pending" doesn't necessarily mean your card was charged. It's just a hold that will expire (sometimes it takes a few days) if the charge is not captured and authorized.
    – Rocky
    Aug 2, 2016 at 15:18
  • 5
    @Rocky "Now transaction is settled and at least I think they should see it at their end." means the transaction completed..
    – Insane
    Aug 2, 2016 at 19:45

4 Answers 4


You should dispute the transaction with the credit card. Describe the story and attach the cash payment receipt, and dispute it as a duplicate charge.

There will be no impact on your score, but if you don't have the cash receipt or any other proof of the alternative payment - it's your word against the merchant, and he has proof that you actually used your card there. So worst case - you just paid twice.

If you dispute the charge and it is accepted - the merchant will pay a penalty. If it is not accepted - you may pay the penalty (on top of the original charge, depending on your credit card issuer - some charge for "frivolous" charge backs).

It will take several more years for either the European merchants to learn how to deal with the US half-baked chip cards, or the American banks to start issue proper chip-and-PIN card as everywhere else. Either way, until then - if the merchant doesn't know how to handle signatures with the American credit cards - just don't use them. Pay cash.

Given the controversy in the comments - my intention was not to say "no, don't talk to the merchant". From the description of the situation it didn't strike me as the merchant would even bother to consider the situation. A less than honest merchant knows that you have no leverage, and since you're a tourist and will probably not be returning there anyway - what's the worst you can do to them? A bad yelp review?

You can definitely get in touch with the merchant and ask for a refund, but I would not expect much to come out from that.

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    Since merchant does not have my signature, can that be used as a proof that credit card transaction should not be honred? Aug 2, 2016 at 8:21
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    @redfoxjumps I seriously doubt it. The proof of physical presence is the chip, not the signature.
    – littleadv
    Aug 2, 2016 at 8:26
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    I'm surprised that you say to start with the CC, when you admit the merchant will pay a penalty this way. It seems like an honest mistake that can be easily rectified with contacting the merchant again. If they still won't budge, then of course go to the CC, but why not give them another chance once the proof is obviously there? I'd take the opposite approach.
    – TTT
    Aug 2, 2016 at 14:44
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    @TTT the OP tried to talk to the merchant, and clearly the merchant wasn't in the mood to understand how the system works.
    – littleadv
    Aug 2, 2016 at 16:51
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    @littleadv true, but I think the cashier not being sure OP actually paid at the time is different than talking to them (probably a manager or owner) once they know for sure that OP did in fact pay twice.
    – TTT
    Aug 2, 2016 at 17:30

Most merchants (also in Europe) are reasonable, and typically are willing to work with you. credit card companies ask if you tried to work with the merchant first, so although they do not enforce it, it should be the first try.

I recommend to give it a try and contact them first. If it doesn't work, you can always go to the credit card company and have the charge reversed.

None of this has any effect on your credit score (except if you do nothing and then don't pay your credit card bill).

For the future: when a transaction supposedly 'doesn't go through', have them write this on the receipt and give it to you. Only then pay cash.

I am travelling 100+ days a year in Europe, using my US credit cards all the time, and there were never any issues - this is not a common problem.

  • 7
    At least in the UK you'll normally get a void "receipt" if the card has scanned but really doesn't go through.
    – Chris H
    Aug 2, 2016 at 13:21
  • @ChrisH: If "the terminal isn't working" (i.e. it actually went through fine and the merchant is dishonest or incompetent) you won't have such a receipt, though. But it's a good idea to check for one as a quick confirmation that their claim makes sense. Aug 2, 2016 at 14:50
  • 2
    @R.. Absence of such a receipt is grounds for waiting, obtaining signed notes on receipts and/or letterhead, or whatever works in the situation.
    – Chris H
    Aug 2, 2016 at 14:58

As a rule of thumb, go in the order of proximity to the transaction. This would typically mean:

  1. Merchant first. This is the easiest for everyone. The merchant has motivation to keep their customers happy, and also not get dinged by a credit card dispute, which could affect their reputation with their processor and possibly have a cost too.
  2. Interim payment processor such as PayPal/Amazon/Google/Apple, etc, if applicable. The payment processors also have a reputation to uphold and should be willing to help you if the merchant does not.
  3. Credit Card dispute. This should be the final option and usually requires the most amount of documentation.

Side note: I own a website that provides an online service that accepts PayPal and credit cards (via PayPal), and I personally have experience with all 3 of the above options. I can tell you from the merchant's point of view that I would also prefer the same order. I've had people contact my customer service department asking for a refund and we always immediately comply. Some people never contact us and just file a dispute directly with PayPal, and although refunding through the PayPal dispute is just as easy as refunding directly, it always makes me ask, "Why didn't they just contact us first?" One time we had a customer skip us and PayPal, and filed a dispute directly with their Credit Card. The CC company contacted PayPal and PayPal contacted us. The process was the same from my point of view, I just clicked a button saying issue refund. But my $5 refund cost me an additional $20 due to the CC dispute. Now that I know this I will never approve a CC dispute again. Anytime one happens I would just issue a refund directly, and then notify the dispute that their CC has already been refunded, which should end the dispute.


Always try to work with the vendor directly, first.

It's very straightforward for an honest vendor to refund the charge, and the transaction only costs him a few pennies at most.

Chargebacks hurt the merchant unduly

If you initiate a chargeback, the merchant is immediately charged an irreversible fee of about $20 simply as an administrative fee. He'll also have to refund the charge if it's reversed. To an honest merchant who would've happily refunded you, it's unfair and hurtful.

In any case, now that he's out-of-pocket on the administrative fee, his best bet is to fight the chargeback - since he's already paid for the privilege to fight.

Also, a chargeback is a "strike" against the merchant. If his chargeback rate is higher than the norm in his industry, they may raise his fees, or ban him entirely from taking Visa/MC. For a small merchant doing a small volume, a single chargeback can have an impact on his overall chargeback rate.

Chargebacks don't always work.

The "threshold of proof" for a chargeback varies by patterns of fraud and the merchant's ability to recover. If you bought something readily fungible to cash - like a gift card, casino chips, concert tickets etc., forget it. Likewise if you already extracted the value (last month's Netflix bill).

Chargebacks don't quite settle the matter

Credit card chargeback only withdraws a payment method. Your bill is still due and payable. The merchant is within his rights to "dun" you for payment and send you to collections or court. Most merchants don't bother, because they know it'll be a fight, an unpleasant distraction and bad for business. But they'd be within their rights.

Working with the merchant to settle the matter is a final resolution.

  • +1 for that last paragraph. It doesn't apply to the OP as they have paid in cash (and hopefully have proof of that), but it's a good reminder that disputing CC charges isn't a game one can't lose. Sep 5, 2017 at 12:27

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