Charge bank cover?

Pippa12345

I purchased two theatre tickets in February for an August production using my credit card. Due to the Covid-19 Pandemic the theatre has gone into administration. I am in the process of attempting a charge back from the theatre but expect the administrator will have frozen their accounts so I am not expecting this to be successful. If I am unable to get my money back from the theatre am I able to make a claim from my credit card? 
Thank you. 
Pippa. 

[Deleted User]

Yes, under section 75 if each ticket was more than £100, but the chargeback will work, as it comes from the retailer's bank.

Pippa12345

Okay. The tickets were £25 each so only a total of £51 was spent. I could do with it back though. Thanks. 

SnowTiger

Pippa12345 said:

I purchased two theatre tickets in February for an August production using my credit card. Due to the Covid-19 Pandemic the theatre has gone into administration. I am in the process of attempting a charge back from the theatre but expect the administrator will have frozen their accounts so I am not expecting this to be successful. If I am unable to get my money back from the theatre am I able to make a claim from my credit card? 

There's been some confusion and debate here about who pays out when a chargeback is successful.

My understanding is that the merchant acquirer (whoever provides/provided the theatre with merchant services) pays.  Therefore, if your claim is successful, and it probably will be, you will receive a refund even if the theatre has gone bust.

Usually the merchant acquirer would deduct the chargeback from future payments to the 'retailer'.

Sandtree

SnowTiger said:
There's been some confusion and debate here about who pays out when a chargeback is successful.

My understanding is that the merchant acquirer (whoever provides/provided the theatre with merchant services) pays.  

I am curious on this one too... my own understanding (not as an expert) in most cases it comes from the float the acquirer withholds from the merchant however in the case of bankruptcy this is likely to be insufficient for service or mail order companies etc. 

I am then slightly torn as most chargebacks are instant, with the condition your bank can recharge the amount within 28 days, but realistically in an insolvency 28 days is nothing and so someone else must be stumping up the cash.

Gut says you are possibly right (and even more likely that the OP gets their money back rather than who pays) but having fortunately never been there I cannot say from personal experience.

jet01

I think Sandtree is right. My understanding is that Merchant Acquirers tier their charges and the period and amount that they keep funds back for according to how risky their business is. Those funds are then used to cover charge backs. For this reason travel companies and adult services/!!!!!! are deemed very high risk and get charged high fees and cash is withheld by the acquirer for the maximum period allowed because typically these kind of businesses are most likely to generate charge backs. For similar reasons most acquirers charge more for web and other card holder not present transactions then they do for in person transactions where the card holder is present. 

Not sure but In cases where the funds held by the acquirer are not sufficient to cover all charge backs in full then I assume that they recover them from the seller. In the case of bankruptcy I think the merchant acquirer would be responsible for settlement and they would be treated like any other creditor of the failed business. 

It has been in the news quite a bit in the US during the last few months since the start of the pandemic because Square amongst others suddenly started keeping back the maximum amount they were legally allowed to and for longer than usual because of what they saw as the increased risk due to the current conditions. Obviously EU law is different so not sure if that has strarted happening over here as well yet. 

Nebulous2

Barclays was withholding money from travel companies quite early in the crisis, though I haven’t seen anything recently. 

https://news.google.com/articles/CAIiEP4rTr3LmLgyvFOWftjeXjkqGQgEKhAIACoHCAow4uGPCzDQpKMDMMadsAY?hl=en-GB&gl=GB&ceid=GB%3Aen

They’ve been absolutely hopeless with a chargeback however. I first contacted them on 19/3/20 and sent all my documents on 14/4/20. I’ve yet to get anything other than a holding message and have just submitted a complaint about the time taken. 

Sandtree

Nebulous2 said:

Barclays was withholding money from travel companies quite early in the crisis, though I haven’t seen anything recently. 

https://news.google.com/articles/CAIiEP4rTr3LmLgyvFOWftjeXjkqGQgEKhAIACoHCAow4uGPCzDQpKMDMMadsAY?hl=en-GB&gl=GB&ceid=GB%3Aen

They’ve been absolutely hopeless with a chargeback however. I first contacted them on 19/3/20 and sent all my documents on 14/4/20. I’ve yet to get anything other than a holding message and have just submitted a complaint about the time taken. 

Barclays denied it was possible to do a chargeback for faulty goods/services before to me... even when I pointed them to a document on their website that gave the chargeback code for faulty goods/service they still wouldn't raise the request until they'd spoken to a manager. Not my top ranked bank for many things but maybe the least worst when considered in the round (for our needs at least)