American Express Chargeback Reason Codes

As an e-commerce merchant, I've dealt with American Express disputes and chargebacks firsthand.

I'm here to share this knowledge and help you navigate these reason codes.

We'll dive into the specific codes within each category, their root causes, preventive measures, and the evidence needed to contest any disputes.

Let's see some reason codes.

Key Takeaways

• Merchants have 20 days to respond to all chargeback / dispute codes.
• American Express labels “chargebacks” as the reversal of funds and “disputes” as fighting an unfair transaction.
• Card Members are whom Amex calls cardholders.
• Reason codes are code classifying why a cardholder disputes a charge.

1. Card Member (Cardholder) Dispute

Notes:

• Sellers have 20 days to respond to Card Member dispute codes.

1 - C02: Credit Not Processed

Description: American Express has not received the credit the merchant was supposed to apply to the card.

Causes:

• The credit the business issued was not for the disputed amount.
• Credit was issued but was not processed before the customer received their latest billing statement.
• The credit issued wasn't for the full amount.
• Shopper didn't understand the return policy.

Prevention:

• Process credits immediately for the amount owed to the customer.
• Provide the date the credit was or will be issued and the amount.

Evidence:

• If no credit is due, an explanation of why credit is not due with appropriate documents to support this position.
• Proof that a credit directly offsets the disputed charge has already been processed.

2 - C04: Goods / Services Returned or Refused

Description and cause: The goods or services were returned or refused, but the Card Member did not receive a credit.

Prevention:

• Process and submit return credit immediately after receiving goods or notification of refused goods.
• Post your return and refund policies where buyers can see them before the transaction.
  • e.g., near the register or on online checkout pages.

Evidence:

• A copy of the charge record indicating the terms and conditions of the purchase with details explaining how the customer did not follow the policy.
• If goods / services refused: proof that the goods were accepted.
  • e.g. signed delivery slip if the goods were delivered.
• Proof that a credit that directly offsets the disputed charge has already been processed.

3 - C05: Goods / Services Canceled

Description and cause: The goods or services ordered were canceled.

Prevention:

• Submit the credit on the same day cancellation is received.
• Inform the customer of the approximate date you will be issuing credit.
• Provide the customer with a cancellation number or confirmation.
• Post your cancellation, return, and refund policies so they can be seen before the transaction.
  • e.g., near the register or online checkout pages.
• Before completing the purchase, have the customer 'accept' your terms/conditions and policies.

Evidence:

• Copy of your cancellation policy
• Copy of the charge record indicating the terms and conditions of the purchase and details explaining how the customer did not follow the policy.

4 - C08: Goods / Services Not received or Only Partially Received

Description and cause: The Card Member claims to have not received the goods / services or only received them partially.

Prevention:

• Set expectations by providing realistic delivery dates.
• Ensure goods are provided or delivered by the agreed-upon date / time / location.
• Notify customers if there is a delay in delivering goods or of expected delivery dates if goods are out-of-stock.
• Confirm and ship to the full billing address specified by the customer and request proof of delivery on all items.
• Do not submit charges for back-ordered items.
• Get a signature for in-store pickups.
• Issue refunds within 24 – 28 hours of being notified that goods / services were not received.

Evidence:

• Proof that the customer's IP address at the time of purchase matches the IP address where the user downloaded the digital goods.
• Proof of Delivery, including delivery date and shipping address.
• Date and time the user accessed and downloaded their digital goods (if applicable).

5 - C14: Paid by Other Means

Description and cause: The cardholder has provided proof of payment using another method.

Prevention:

• Check all payments received for the charge and ensure the correct form of payment is processed or billed.
• Process a correction or offsetting credit(s) when you detect or are notified of the billing error.

Evidence:

• Documentation showing that the customer's other payment was unrelated to the disputed charge.
• Proof that the customer provided consent to use the card as a valid form of payment for the disputed charge.

6 - C18: “No Show” or CARDeposit Canceled

Description and cause: The cardholder claims to have canceled a lodging reservation, or a credit for a CARDeposit charge was not received.

Prevention:

• Immediately process cancellation requests.
• Provide guests with a cancellation number or confirmation.
• Log all confirmation or cancellation numbers as required by the Assured Reservation and CARDeposit programs.
• Advise the customer of the cancellation policy at the time of the reservation.
• Disclose your cancellation and refund policies where they can be seen prior to the transaction.

Evidence:

• Documentation that supports the validity of the "no show" reservation or CARDeposit charge.

7 - C28: Canceled Recurring Billing

Description: The cardholder claims to have canceled or attempted to cancel recurring billing charges for goods or services.

Causes

• User does not understand the billing process and / or automatic renewal terms.
• Merchant billed the customer for an Introductory Offer.

Prevention:

• Ensure all future billings are canceled upon request.
• Immediately process cancellation requests.
• Provide the customer with a cancellation number or confirmation.
• Present your cancellation policy before the customer proceeds with their order.

Evidence:

• A copy of your cancellation policy.
• Proof that the customer has not canceled and continues to use the service or receive the goods.
• Obtained the customer's express consent to accept the terms and conditions of the Introductory Offer.

8 - C31: Goods / Services Not as Described

Description: The Card Member alleges receiving goods or services that differ from the written description provided during the charge.

Causes:

• The goods or services received do not meet the agreed-upon quality description at the time of purchase.
• Friendly fraud.

Prevention:

• Ensure the exact goods or services ordered are provided.
• Provide detailed item descriptions on invoices and online order confirmations and contracts.
• Quickly issue refunds.
• Don't sell fake products.
• Pack items to avoid breakage.

Evidence:

• Proof refuting the customer's claim that the written description differs from the goods / services received.
• Acknowledgement that the customer agreed to accept the goods or services as provided.
• Proof that goods and services matched what was described at the time of purchase.
  • e.g., photographs, emails.
• Evidence of seller's effort to repair, replace damaged goods, or offer substitute services.
• Communication logs.
• If returned, state how the buyer did not comply with the merchant's documented cancellation, return policy, or applicable law and regulations.
• Show that the customer agreed to accept the goods or services "as is."

9 - C32: Goods / Services Damaged or Defective

Description and cause: The Card Member claims to have received damaged or defective goods / services.

Prevention:

• Ensure merchandise is securely packaged.
• Resolve claims involving damages or defective goods/merchandise and provide return authorization if purchase policy permits.
• Promptly issue credit or replacement.
• Before completing the purchase, have the customer 'accept' your terms/conditions and policies.

Evidence:

• Proof refuting the customer's claim that the goods or services were damaged or defective (provided that, in the case of goods, they were not returned to you).
• Proof that the customer agreed to accept the goods as delivered.

10 - M10: Vehicle Rental - Capital Damages

Description: The Card Member claims to have been billed (incorrectly) for capital damages of a rental vehicle.

Causes:

• Vehicle damage exceeded 110% of the agreed amount between the merchant and the customer.
• The customer expected the disputed amount to be paid for by a third party.
  • i.e., insurance-related reimbursements for Collision Damage Waiver (CDW) costs.
• The amount charged does not match the amount the renter agreed to pay.
• The customer claims they did not cause some or all of the damage for which the merchant charged.
• Merchant error.
• Renter did not understand their responsibility for capital damages.

Prevention: Before submitting charges, ensure you obtain the customer's acknowledgment of responsibility and proof of consent to bill their card for the amount in question.

Evidence:

• Rental Agreement.
• Damage Report: Provide a detailed report of the damages, including date and time.
• Photographs: Attach before-and-after photos of the vehicle, highlighting damages.
• Communication logs.
• A copy of the rental policies, particularly those related to damages and repairs.

11 - M49: Vehicle Rental - Theft or Loss of Use

Description and cause: Card Member claims that the merchant charged them (incorrectly) for loss or theft of a rental vehicle.

Prevention:

• Install GPS tracking devices in all rental vehicles.
• Offer and encourage comprehensive insurance coverage for theft and loss.
• Ensure rental agreements clearly state responsibilities and liabilities for theft or loss.

Evidence:

• A signed copy of the rental agreement outlining theft and loss policies.
• Records of ID and credit checks performed before the rental.
• Copy of the police report filed for the theft or loss incident.
• Communication logs.

2. Fraud

Notes:

• Vendors have 20 days to respond to fraudulent reason codes.

1 - F10: Missing Imprint

Description: The Card Member claims they did not participate in this charge, and the merchant hasn't provided a copy of the card imprint.

Causes:

• Card wasn’t swiped, or the chip was not successfully read at the time of the transaction.
• Family fraud: A form of friendly fraud where a family member makes a purchase without the cardholder's permission.

Prevention:

• Ensure that cards are swiped and / or that the chip was successfully read at the time of the transaction.
• Verify card-not-present (CNP) transactions are correctly identified and enroll in the Keyed No Imprint Program if needed.
• Ensure all transactions are processed using EMV chip readers.
• Use manual imprint machines as a backup when electronic methods fail.

Evidence:

• A signed copy of the transaction receipt or authorization slip.
• Copies of any customer identification used during the transaction.
• Logs of any card verification methods used, such as AVS or CVV checks.

2 - F14: Multiple ROC’s

Description: The cardholder claims they participated in one valid transaction with the establishment but denies participating in additional, subsequent transactions submitted by the merchant.

Causes: The customer acknowledges using their card for a valid purchase with the merchant. However, the merchant then submits additional transactions that the Card Member denies knowledge of.

Prevention:

• Be sure to only submit transactions for valid purchases made by the customer.
• Obtain customer confirmation before processing multiple records of charge (ROC).

Evidence:

• Signed copies of each ROC related to the transaction.
• Itemized billing statements showing the details of each charge.

3 - F24: No Card Member Authorization

Description: The Card Member denies participation in the charge submitted by the merchant. The merchant also failed to prove that the cardholder participated in the charge.

Causes:

• A family member used the customer's card.
• Buyer’s card or card number has been compromised and used by a fraudster.
• The shopper didn't recognize the purchase.

Prevention:

• Maintain consistent information on your billing descriptor, including your "doing business as" name and physical location or website.
• Avoid generic descriptors when possible.
• Add "no show," "advanced deposit," or "installment #__" to the charge descriptor, where applicable.

For card-present transactions:

• Ensure the POS system is EMV-enabled, where possible.
• Check ID during all face-to-face transactions, especially high dollar amounts.
• Obtain a valid authorization code and imprint for keyed transactions or key CID.

For card-not-present transactions:

• Ensure you have express consent from the customer to bill for the specific goods or services.
• Retain documentation that ties the customer's billing consent to the particular goods / services and billing terms.

Evidence:

• Transaction details.
• Copy of the transaction receipt signed by the Card Member.

4 - F29: Card Not Present

Description: An unauthorized transaction happened without the physical card involved.

Causes:

• Shopper’s card or card number has been compromised and used fraudulently.
• Customer's card was lost/stolen.
• Friendly fraud.

Prevention:

1. Ensure you have express consent from the customer to bill for the specific goods or services.
2. Require validation such as a PIN or imprint.

Evidence:

• Proof that you attempted to validate the CID and did not receive a response or an "unchecked" response.
• Proof that you validated the address via authorization and shipped goods to the validated address.

5 - F30: EMV Counterfeit

Description and cause: The cardholder denies the charge, and a counterfeit chip card was used but not processed as such. The POS system either couldn't read chip cards or the transaction was keyed in manually.

Prevention:

• Ensure the POS system is EMV/Chip enabled, where possible.
• Check IDs.
• Upgrade your terminals.
• Obtain a valid authorization code and imprint for keyed transactions or key CID.

Evidence:

• Proof that the POS system processed a chip card transaction.

6 - F31: EMV Lost / Stolen / Non-Received

Description and cause: A fraudster used the actual credit card to make a purchase.

Prevention:

• Obtain additional verification (e.g., imprint or PIN)
• Train staff to properly handle terminal issues.

Evidence:

• Proof that the transaction was not fraudulent.
• Security footage.

3. Processing Errors

Notes:

• Merchants have 20 days to respond to processing error reason codes.

1 - P01: Unassigned Card Number

Description: The merchant has submitted a charge using an invalid or incorrect card number.

Causes:

• The transaction was processed to an account number that no longer exists (e.g., the card was canceled or replaced).
• Automatic recurring billings used a card number that no longer exists.
• The Card Member provided an incorrect card number.

Prevention:

• Double-check card numbers.
• Require additional verification from customers like a PIN.

Evidence:

• Imprint copy confirming the card number.
• Evidence of authorization approval for the card number obtained.
• Copy the charge record from the terminal that reads the card number electronically.

2 - P03: Credit Processed as Charge

Description and cause: The charge submitted should have been submitted as a credit.

Prevention:

• Ensure the amount submitted accurately reflects a debit or credit.
• Process a correction or offsetting credit(s) when you detect or are notified of the billing error.
• Issue credits/refunds within 7 calendar days.
• Ensure your refund policies state the time frames of when credits will be issued.

Evidence: Proof that the charge was submitted correctly.

3 - P04: Charge Processed as Credit

Description and cause: The credit submitted should have been submitted as a charge.

Prevention:

• Train your staff on properly processing debits, credits, and reversals.
• Double-check the type of transaction before processing.

Evidence: Proof that the business submitted the credit correctly.

4 - P05: Incorrect Charge Amount

Description: The charge amount submitted differs from the amount the cardholder agreed to pay.

Causes:

• Merchant error.
• The charge amount was greater than the customer expected.
  • e.g., due to an addition error, shipping or handling fee, taxes, delayed charges, restocking fee, etc.

Prevention:

• Ensure the amount submitted accurately reflects a debit or credit.
• Get explicit consent from the Card Member before changing the transaction amount.

Evidence: Receipts, invoices, order confirmations, or any other documentation showing the cardholder authorized the charge. Ensure this evidence includes any additional or delayed charges.

5 - P07: Late Submission

Description: The merchant didn’t submit the charge within the required time frame.

Causes: The charge was authorized but was submitted after the authorization expired.

Prevention:

• Automate the process of submitting transactions.
• Review transaction records to identify any potential late submissions and take corrective action as needed.
• Complete transactions within 180 days of the purchase date.

Evidence: Proof the charge was submitted within the required time frame.

6 - P08: Duplicate Charge

Description and cause: The individual charge was submitted more than once.

Prevention:

• Check to see if a failed charge has been processed before charging again.
• Review all receipts to check if the customer has been billed twice.
• Process a correction or offsetting credit(s) as soon as you detect or are notified of the billing error.

Evidence:

• Documentation showing that each charge is valid.
• Proof that a credit that directly offsets the disputed charge has already been processed.

7 - P22: Non-Matching Card Number

Description and cause: The card number in the submission does not match the card number in the original charge.

Prevention: Process all charges at the time of the transaction. And / or ensure that the card number provided in your charge submission matches the card for which the authorization approval was obtained.

Evidence:

• Card imprint copy confirming the card number.
• Charge record copy from the terminal that electronically read the card number.

8 - P23: Currency Discrepancy

Description and cause: A charge was processed in a different currency than that for which the cardholder provided consent to be billed.

Prevention: Process all charges using the correct currency the customer expects and will recognize. This is part of the Multi-Currency functionality programmed under your point of sale.

4. Authorization

Notes:

• Merchants have 20 days to respond to codes in this category.
• Customers don’t have a time limit to submit disputes in this category.

1 - A01: Charge Amount Exceeds Authorization Amount

Description: The approved transaction amount was lower than the amount that was charged.

Prevention: If you receive a declined authorization, don't process that transaction.

Evidence: Provide records showing the original authorized amount.

2 - A02: No Valid Authorization

Description and cause: The submitted charge did not receive valid authorization; it was declined, or the card expired.

Prevention:

• Ensure all authorization approval requests comply with the Technical Specifications for Authorization.
• Ensure a valid authorization approval is included with your charge submission.
• Don't submit if the authorization approval was declined.

Evidence:

• Authorization approval code obtained during the transaction.
• Logs showing the date, time, and method of the authorization.

3 - A08: Authorization Approval Expired

Description: The charge was submitted after the authorization approval expired.

Causes:

• Business did not submit the charge before the authorization approval expired.
• Merchant attempted to submit the charge during the valid authorization approval time frame, but the submission was not received by American Express (e.g., technical issue).

Prevention:

• Submit the charge within 7 days.
  • Exceptions apply to cruise line, lodging, and vehicle rental industries).
• If you submit beyond 7 days, you must submit a new authorization approval.

Evidence: Proof that a valid authorization approval was obtained in accordance with the Agreement.

5. Chargeback Programs

Notes:

• Merchants have 20 days to respond to codes in this category.
• Amex places merchants in the Immediate and Partial Immediate Chargeback Programs if their chargeback rate (with American Express) is 1% or higher for 3 consecutive months.

Our American Express chargeback and dispute guide has more information on all 3 programs.

1 - FR2: Fraud Full Recourse Program

Description and cause: The business has been placed in the Fraud Full Recourse Program. American Express places merchants in this program if they exceed a certain number of fraudulent transactions. They don’t specify the amount.

Prevention:

• Implement preventative measures for fraud like fraud scoring, AVS, 3D Secure, etc.

2 - FR4: Immediate Chargeback Program

Description: American Express placed the seller in the Immediate Chargeback Program

Prevention: Take the necessary steps to reduce and prevent chargebacks.

3 - FR6: Partial immediate Chargeback Program

Description: Amex placed the merchant in the Partial Immediate Chargeback Program.

Prevention: Take the necessary steps to reduce and prevent chargebacks.

6. Other Codes

Notes:

• Merchants have 20 days to respond to these codes.

1 - R03: Insufficient Reply

Description and cause: Complete support and/or documentation were not provided as requested. Or the merchant didn’t send all requested documentation.

Prevention: Provide all required documentation.

2 - R13: No Reply

Description and cause: American Express did not receive a response to their inquiry within the specified time frame (20 days as of 2024).

Prevention:

• Always respond to the Inquiry Notification by the reply due date.
• If you agree credit is due to the customer, then respond by the reply due date with your authorization for a Chargeback.

Evidence:

• Proof that you responded to the Inquiry within 20 days.

3 - M01: Chargeback Authorization

Description: American Express has received authorization from the merchant to process a chargeback for the charge.

Wrapping Up

Merchants have about 20 days to respond to the chargebacks mentioned above. Your acquirer will specify the necessary evidence for each dispute.

The best way to avoid these codes is to prevent chargebacks altogether. We partner with major alert providers to help you prevent disputes from escalating into chargebacks. Learn how we can assist you.