When you use your credit card for transactions, you qualify for chargeback rights if merchants don’t deliver goods and services. Cowyk Fox from Absa Retail and Business Bank explains: “In essence, a chargeback prevents customers from suffering financial loss and engaging in lengthy disputes with merchants. The bank takes care of this within a clearly defined process. Generally speaking, where a merchant has not delivered a service or product paid for by a card, there would be a chargeback right (which can be processed to the merchant’s acquiring bank). Typically, chargebacks are applicable from the point at which the service was to be delivered.”

This can be applied to certain circumstances if flights have been cancelled due to the COVID-19 outbreak and is evaluated in line with the VISA and MasterCard chargeback rules.

However, customers should be very careful when voluntarily canceling their trip, as they may lose their ability to claim.

The following examples have been provided by FNB but apply to any credit card transaction:

Question 1: A cardholder purchased goods/services and then the merchant cancels the good or service. For example, an airline cancels a flight due to low demand. Does the customer have a dispute right? 

Yes, there is a dispute right when goods/services are not provided for any reason, including bankruptcy or other circumstances. The exception is cancellations due to government prohibition, as government regulation and/or law supersedes association rules on dispute rights. Customers are advised to try to resolve the dispute with the merchant before initiating a dispute.

Question 2: A cardholder purchased goods/services and the merchant cancels the good or service due to a government prohibition.  For example, an airline cancels a flight because the government closed the border. Does the customer have disputes rights? 

No. If the merchant has not provided the service due to a government-imposed prohibition, the cardholder does not have a dispute right. Government regulation and/or law supersedes association rules on dispute rights. The cardholder should work directly with the merchant to resolve the dispute.

Question 3:  A cardholder has tickets for an event such as a sports match or a concert, and the event was rescheduled. However, the cardholder does not want to attend the event on the alternate date chosen by the merchant. Does the cardholder have dispute rights?

Yes. The merchant is responsible for providing the purchased service on the agreed-upon date and the cardholder is not required to accept an alternate date.  However, if the reason for the cancellation of the event was due to a government-imposed prohibition on proceeding with the event as originally scheduled, then the cardholder would not have a right to dispute the transaction. Government regulation and/or law supersedes association rules on dispute rights. The cardholder should work directly with the merchant to resolve the dispute.

Question 4: A cardholder purchased services, however chose not to use them due to the cardholder’s concerns related to COVID-19. For example, the cardholder chooses not to travel on their scheduled flight and cancels their ticket. Does the cardholder have dispute rights?

No, the cardholder does not have dispute rights if he/she chose not to use services made available by a merchant, as the merchant has fulfilled its obligations to provide the service and has properly disclosed its terms and conditions. This also applies to non-airline merchants, such as hotels and other venues that kept their obligations to deliver services. The cardholder should work directly with the merchant to resolve the dispute.

Chris Labuschagne, CEO of FNB Credit Card says FNB customers can lodge a dispute through the banking app.