Chargeback Reason Codes for All Card Networks (Updated 2024)

This guide explains chargeback reason codes and their uses. It covers codes for different card networks and why chargebacks happen. Learn how to use them as a merchant.

Author

Theodore Sterling

Key Takeaways

Reason codes help identify a dispute's cause.
Codes have different time requirements for responses and filings.
These codes aren’t always accurate.
JCB transactions in USD use Discover reason codes.
Most networks retired legacy codes after 2016.

What is a Chargeback Reason Code?

A chargeback reason code is a short code banks use to explain why a cardholder disputes a transaction. Each card network has its own codes. These codes identify why a chargeback happened and show how banks interpret cardholder claims.

However:

They don't always show the full picture.

Merchants can fight chargebacks with incorrect codes.

This often happens with friendly fraud. When cardholders try to defraud sellers by claiming a legitimate transaction wasn't valid.

Payment gateways that have their own dispute processes for their own payment methods (e.g., Amazon Pay). These will not use reason codes.

Reason codes will show up in chargeback reports when your acquirer (payment gateway) lets you know there’s a chargeback. Thus, you’ll have an idea of how to prepare for and prevent future disputes.

We’ll discuss how to interpret all of these codes.

Let’s begin with Visa.

1. Visa Chargeback Reason Codes

Visa reason codes have four categories with 2-digit numbers to identify each section:

13: Customer disputes
10: Fraud
12: Processing errors
11: Authorization errors

Each reason code will have a decimal followed by a single-digit number after the category number.

Let’s look at reason code 13.4:

“13” means it’s a Customer Dispute.
The “.4” means that it’s the specific reason.

And in this scenario, that’s fake merchandise.

Visa overhauled their reason code system with the Visa Claims Resolution in 2018. The goal of this initiative was to make dealing with the reason codes easier.

Learn more about this overhaul — along with the Visa dispute process — in a separate piece.

And check out our guide regarding Visa reason codes for more information on their legacy codes.

These codes aren’t required to know.

However. Knowing that they’re “legacy” will prevent possible misinformation from other sources.

Let’s dive into these codes.

A. Customer Disputes

‍

13.1: Merchandise/Services Not Received

Description:

Customers say they didn't get what they bought.

Causes:

Delivery delays or early charges
Lack of shipping information
Friendly fraud
Wrong delivery address or theft

Prevention:

Deliver on time and give tracking information
Update customers on shipment and delivery dates
Use delivery confirmation
Describe services well and meet deadlines
Inform about stock issues or delays

Evidence:

Transaction details and delivery proof
Communication logs about delivery
Refund proof if order was canceled
Photos linking receiver to cardholder
Proof of website access after transaction

13.2: Canceled Recurring Transaction

Description:

Shopper report charges after canceling or closing accounts.

Causes:

Misunderstanding of cancellation terms
Failure to cancel as requested
Charging closed accounts

Prevention:

Act fast on cancellations
Explain cancellation policies clearly
Check account status before charging
Use Visa Account Updater
Send reminders before charges

Evidence:

Transaction details and cancellation records
Clear communication about terms
Proof of service use before cancellation

13.3: Not as Described or Defective Merchandise/Services

Description:

Goods or services don't match description or are faulty.

Causes:

Product doesn't match description
Item is damaged on arrival
Quality is lower than advertised
Wrong item sent
False claims by customers

Prevention:

Give accurate product details
Check quality before shipping
Offer clear return policies
Use good packaging

Evidence:

Proof item matches description
Proof customer didn't try to return
Refund or replacement documentation

13.4: Counterfeit Merchandise

Description:

Consumers claim they got fake goods.

Causes:

Unknowingly selling fake goods
Intentional sale of counterfeits
Friendly fraud
Supplier provided fake items

Prevention:

Buy from trusted suppliers
Check product authenticity
Do thorough quality checks
Give accurate product details
Sell only genuine products

Evidence:

Detailed transaction records
Proof of purchase from legitimate supplier
Product authenticity certificates
Expert opinions on genuineness

13.5: Misrepresentation

Description:

Vendors misrepresent their product, service, or sale terms.

Causes:

Misleading product descriptions
Hidden fees or unclear terms
Deceptive marketing tactics

Prevention:

Give accurate product details
Disclose all fees upfront
Use honest marketing
Offer fair return policies
Include clear product photos

Evidence:

Transaction details and accurate descriptions
Honest marketing materials
Clear fee disclosure proof
Proof of fulfilling agreed terms

13.6: Credit Not Processed

Description:

Customers claim they didn't get a due refund.

Causes:

Mistakes in refund processing
Miscommunication about refund status
Misunderstanding of refund timeframe
Failure to void canceled transactions

Prevention:

Process refunds quickly
Communicate refund status clearly
Explain refund policies beforehand
Be careful with voiding transactions

Evidence:

Proof of credit or refund
Customer communication logs
Refund policy documentation

13.7: Canceled Merchandise/Services

Description:

Cardholders claim they canceled a service or returned items but didn't get credit.

Causes:

Merchant didn't process the cancellation or return
Credit issued but not on customer's statement yet
Unclear cancellation or return policies
Customer misunderstood return policy

Prevention:

Handle cancellations and returns quickly
Clearly show cancellation and return policies
Confirm processed cancellations or returns with customers
Print return policies on receipts for in-store purchases

Evidence:

Transaction details and proof of cancellation or return
Proof customer agreed to return/cancellation policy
Evidence of service use after cancellation (if applicable)

13.8: Original Credit Transaction Not Accepted

Description:

Issuing bank doesn't accept a credit transaction.

Causes:

Cardholder refuses the credit
Local laws don't allow original credit transactions
Issuer can't process due to rules
Voided transaction receipt not handled right (Europe/inter-regional)
Some card types may not allow original credit transactions

Prevention:

Confirm customer accepts credit before processing
Know local credit transaction laws
Keep good transaction records
Check if issuer can process original credit transactions

Evidence:

Proof of credit transaction reversal
Evidence of resolved issue
Proof of following local credit transaction laws

13.9: Non-Receipt of Cash or Load Transaction Value

Description:

Cardholder says they didn't get full cash amount or correct load value.

Causes:

ATM malfunction or error
Issues loading funds to prepaid cards
Cardholder thinks they got less cash
Faulty ATM cash dispenser
Errors in processing or fund transfer

Prevention:

Check and maintain ATMs often
Give credits fast for any errors
Keep detailed ATM and load transaction records

Evidence:

ATM logs or video of cash coming out
Records of successful load transactions
Proof of correct ATM withdrawal amount
Papers for any refunds already given

B. Fraud

‍

10.1: EMV Liability Shift Counterfeit Fraud

Description:

Fraud using a fake EMV (chip) card at a non-EMV terminal.

Causes:

Merchant didn't use chip reader
Incomplete chip data sent to Visa

Prevention:

Use EMV terminals for all chip cards
Verify cardholder correctly (signature, PIN)
Make imprints for all in-person transactions
Train staff on handling terminal issues
Update and maintain EMV equipment regularly

Evidence:

Proof of approval (signed receipt or PIN)
EMV compliance proof (terminal logs, chip data)
Proof card was present during transaction
Refund proof if already given for disputed transaction

10.2: EMV Liability Shift Non-Counterfeit Fraud

Description:

Fraud using a real EMV card without PIN verification.

Causes:

Use of lost or stolen card
Cardholder data theft
Skipping PIN during transaction
Using terminal that doesn't need PIN

Prevention:

Use EMV terminals for all chip cards
Check card security codes each time
Train staff to spot odd behavior
Always verify cardholder correctly (signature, PIN)
Make imprints for all in-person transactions

Evidence:

Proof of account holder approval (receipt or PIN)
EMV compliance proof (terminal logs, chip data)
Proof of correct processing on PIN-ready device

10.3: Other Fraud – Card-Present Environment

Description:

Unauthorized transaction in a physical store.

Causes:

Merchant charged wrong amount
Someone used stolen card
Transaction typed in or at unattended terminal

Prevention:

Check card codes and ID
Use EMV terminals for chip cards
Give clear transaction details on receipts
Type in details as last resort
Mark card-absent transactions clearly when processing

Evidence:

Detailed transaction info
Proof of approval (signed receipt or PIN)
Proof the card was there

10.4: Other Fraud – Card-Absent Environment

Description:

Unauthorized transactions in online or phone purchases.

Causes:

Stolen card details used for fraud
Hackers getting into customer accounts
Cardholders tricked by scams
Unclear merchant names confusing cardholders

Prevention:

Use tools like 3D Secure and Address Checks
Watch for odd transaction patterns
Double-check details for risky orders
Use clear billing names
Always get approval, no matter the amount

Evidence:

Detailed transaction records and approval proof
Delivery confirmation or service proof
Customer communication records
Proof of ID check attempts
Refund proof if already given

10.5: Visa Fraud Monitoring Program

Description:

Visa's system flags a transaction as fraudulent.

Causes:

Merchant's fraud rate is too high (above 0.65%)
Business is in Visa's Fraud Monitoring Program

Prevention:

Use strong fraud prevention tools
Update fraud prevention plans often

C. Processing Errors

‍

12.1: Late Presentment

Description:

A transaction isn't sent to Visa on time.

Causes:

Customer's account becomes inactive
Technical issues
Merchant forgets to close daily transactions

Prevention:

Process transactions on the same day of sale
Set up automatic daily transaction closures
Check and fix payment systems often
Train staff to submit transactions on time

Evidence:

Proof of timely submission to card processor
System logs showing transaction processing attempts

12.2: Incorrect Transaction Code

Description:

A merchant uses the wrong code for a transaction.

Causes:

Staff enters transaction codes wrong
Mix-up between credit and debit processes
Wrong handling of transaction reversals
Transaction and authorization types don't match
System glitches pick wrong code

Prevention:

Train staff well on entering transaction codes
Use systems that double-check transaction accuracy
Update and fix point-of-sale systems often

Evidence:

Detailed logs showing correct code use
Receipts proving transaction processing
Documents explaining reasons for specific transaction handling

12.3: Incorrect Currency

Description:

A transaction uses the wrong currency.

Causes:

System currency settings are wrong
Dynamic Currency Conversion (DCC) used without customer's permission
Customer not told about DCC or related fees

Prevention:

Double-check currency choice before processing transactions
Offer DCC as a choice, not a must
Train staff on proper multi-currency transaction steps
Tell customers about currency conversion and fees
Always allow purchases in local currency

Evidence:

Proof of correct currency use (receipts, logs)
Proof of customer's DCC choice, if used

12.4: Incorrect Account Number

Description:

A transaction uses a wrong or invalid account number.

Causes:

Merchant enters wrong account number
Customer gives incorrect account number
System error in sending or storing account number
Transaction processed to wrong account or after account closed

Prevention:

Use systems that check account numbers
Always get approval before finishing transactions
Use card swipe or chip reading when possible

Evidence:

Proof of correct account number used (e.g., signed receipt)
Proof account number was approved before processing

12.5: Incorrect Amount

Description:

A customer says they were charged the wrong amount.

Causes:

Shopper didn't count extra fees or taxes
Transaction amount changed without customer's approval
Same transaction processed twice
Errors when typing in transaction details

Prevention:

Double-check all amounts before processing
Clearly show all charges, including taxes and fees
Use systems to prevent double transactions
Always get customer's approval before changing amounts
Use card-reading tech instead of typing when possible

Evidence:

Detailed transaction records, with times
Signed receipt or bill showing the right amount
Proof customer agreed to final payment amount

12.6: Duplicate Processing

Description and cause:

A merchant charges a payment twice or after another payment was used.

Prevention:

Give credit right away if you spot a double charge
Check all receipts before depositing
Send batches only once
Cancel card charges if customer changes payment method

Evidence:

Proof of two separate transactions for different items/services
Proof only card payment was used

12.7: Invalid Data

Description:

A transaction uses wrong or invalid data during approval.

Causes:

Wrong Merchant Category Code (MCC) used
Wrong transaction type indicator sent
Wrong country or state code given
Wrong "Special Condition" indicator entered
Wrong transaction date given

Prevention:

Use systems to check information before processing
Update transaction processing systems often
Make sure all required fields are filled right
Check MCC matches the one used in transaction clearing

Evidence:

Detailed transaction records showing correct data used

D. Authorization

‍

11.1: Card Recovery Bulletin

Description:

Sale exceeded the floor limit without asking for approval.

Causes:

Seller didn't check the Card Recovery Bulletin before sale
Card was reported lost but used anyway

Prevention:

Always check the Card Recovery Bulletin for flagged cards
Ask for approval for sales above your floor limit
Know Visa's rules for handling multiple approvals

Evidence:

Proof the sale happened before the card was listed
Proof that approval was obtained and the card was present

11.2: Declined Authorization

Description:

A sale is made after an approval was declined. The seller got a "decline" response but still completed the sale.

Causes:

Seller made a sale after getting a declined approval
System error caused the sale to override a declined approval
Many approval tries were made on a declined card
Seller tried to force or bypass a declined approval

Prevention:

Never make sales after a declined approval response
Train staff on proper approval steps
Stop the sale if the card is declined
Ask for another payment method after a decline

Evidence:

Show valid approval details before making the sale
Prove if a second approval request was accepted
Submit records for multiple approvals in rentals or lodging

11.3: No Authorization

Description

The sale was made without getting approval from the card issuer.

Causes:

Approval not obtained before making the sale
Delay in getting approval after the first request
Approval was asked for the wrong amount
Seller added a tip after initial approval

Prevention:

Always get approval before making any sale
Process sales for the exact approved amount
Ask for approval on the same day as the sale
Don't include tips on previously approved amounts
Follow Visa rules for multiple approvals

Evidence:

Records with the approval code, amount, and date

2. Mastercard Chargeback Reason Codes

Mastercard reason codes all have a reason code that is shown by a 4-digit code that begins with “48.”

For instance, the reason code “4853” represents cardholder disputes.

They overhauled their system in 2016 by condensing their massive (and confusing) list of chargeback codes.

We have more information regarding the legacy codes in a separate piece.

What if you want to know more about Mastercard’s chargeback process?

There’s a guide for that, too.

There’s not much else to say. Let’s check them out.

A. Cardholder Disputes

Credit Posted as a Purchase

Description:

A credit is wrongly processed as a charge.

Causes:

Seller makes a mistake during refund processing
Technical issue in the payment system
Cardholder misreads their statement
Staff lacks training on credit processing steps

Prevention:

Check all refund amounts and types before processing
Communicate refund details to customers
Train all staff on credit processing

Evidence:

Sale records and receipts
Proof the chargeback doesn't meet Mastercard rules

Counterfeit Goods

Description:

A customer claims they got fake goods.

Causes:

Seller unknowingly sold fake items from unreliable suppliers
Merchant misrepresented products as real when they were fake
Poor quality checks led to shipping of fake goods
Dishonest sellers knowingly sold fake items as real

Prevention:

Use only trusted suppliers for products
Check inventory for signs of fakes
Give customers proof of product authenticity
Have a clear return policy for fake item claims
Check product details for accuracy before listing

Evidence:

Purchase records from authorized sellers or makers
Proof of authenticity for the disputed items

Goods / Services Not as Described (or Defective)

Description:

Shoppers claim that the goods or services don't match what was promised.

Causes:

Item arrives damaged or broken
Service quality is below agreed standards
Wrong item sent
Product quality is lower than expected

Prevention:

Give accurate, detailed descriptions of products and services
Use clear, high-quality images in all listings
State refund and return policies clearly
Pack items securely to prevent shipping damage
Answer customer questions and complaints quickly

Evidence:

Proof of accurate product description or service agreement
Photos or videos of the product received by buyer
Delivery proof and tracking info
Expert opinions or inspection reports, if needed

Addendum Dispute

Description:

A cardholder reports an extra charge added to a valid purchase.

Causes:

Seller mistakenly processes extra charges
Misunderstanding about added fees or charges
Unauthorized access to cardholder's account
Customer forgets about previously approved charges
Incomplete or wrong ATM cash payout

Prevention:

Explain all charges and fees before purchase
Get clear approval for any extra charges
Send full purchase details to customers
Check and balance ATMs often
Handle cancellation requests quickly and confirm with customers

Evidence:

Proof of customer's approval for all charges
Proof of security steps to prevent unauthorized access

Goods or Services Not Provided

Description:

Customers claim they didn't get the goods or services they paid for.

Causes:

Seller failed to provide the purchased goods or services
Merchant has gone out of business
Vendor can no longer fulfill the order for various reasons
Delivery issues stopped the customer from getting their purchase
Poor communication about service availability or completion

Prevention:

Send purchase confirmation emails with clear details
Use a known business name on billing statements
Ask for signatures for high-value deliveries
Keep to promised delivery dates
Tell customers quickly about any delays

Evidence:

Tracking info or signed delivery receipts
Proof that services were provided
Proof of shipment within the agreed time

Cardholder Dispute of a Recurring Transaction

Description:

A consumer claims a recurring sale was not approved or they tried to cancel it.

Causes:

Customer forgot about or misunderstood the recurring billing agreement
Billing name on statement was not known
Shopper thinks the recurring charge is fake
Seller charged after cancellation or without clear consent

Prevention:

Send reminders before each charge
Make cancellation process easy and quick
Use known billing names
Quickly confirm and process cancellation requests

Evidence:

Proof of customer's approval for recurring billing
Records of recurring billing agreement terms
Evidence of customer's cancellation attempt, if applicable

Transaction Did Not Complete

Description:

A payment is taken but the sale isn't finished.

Causes:

Technical issues during payment processing
Unclear messages about order status
Customer confusion about pending charges
Seller fails to deliver after payment

Prevention:

Keep customers informed about their order status
Explain temporary approval holds clearly
Quickly fulfill orders or refund cancellations
Send sale confirmations via text or email

Evidence:

Proof that the sale was finished successfully

Digital Goods $25 or Less

Description:

A user claims unapproved digital purchases due to poor account security.

The seller collected card details for future digital purchases but failed to use controls. This led to unwanted or unapproved sales, usually for small amounts under $25.

Causes:

Weak security controls on digital accounts
Unauthorized access to cardholder's account
Customer sharing account information
Seller failing to use enough purchase controls

Prevention:

Require two-step verification and strong passwords
Set purchase limits without extra approval
Teach customers about digital purchase risks
Turn off purchases by default, requiring opt-in

Evidence:

Records of security measures and customer communication

Credit Not Processed

Description:

A customer claims they're owed a refund or credit, but it hasn't been given or shown on their statement.

Causes:

Seller didn't process refund after cancellation
Wrong or badly applied refund amount
Customer misunderstood refund policy or timeline
Merchant failed to acknowledge return or explain policy clearly

Prevention:

Give refunds quickly after returns or cancellations
Explain refund policies and timelines to customers clearly
Check refund amounts twice before processing
Keep full records of all refunds and credits
Ask for customer confirmation before finishing card-not-present purchases

Evidence:

Original sale records
Messages with customer about the refund
Refund or credit sale records

No-Show Hotel Charge

Description:

The cardholder was charged a no-show fee after canceling their hotel booking.

The hotel took part in the Mastercard Guaranteed Reservation Service.

Cause:

Cardholder was not told about the no-show fee
Hotel did not follow cancellation rules
Wrong processing of booking changes by the hotel
Poor communication between hotel and cardholder about fees

Prevention:

Tell guests about all fees before confirming bookings
Keep records of all booking changes and cancellations
Follow Mastercard Guaranteed Reservation Service rules
Train staff to handle cancellations and changes correctly

Evidence:

Proof of the cancellation and written confirmation
Records of booking details and cancellation terms
Evidence of following reservation rules and fees

B. Fraud

4871: Chip / PIN Liability Shift - Lost / Stolen / Never Received Issue (NRI) Fraud

Description:

A fake sale is made using a chip-enabled card reported lost, stolen, or never received.

Causes:

Fake use of an unreceived new or replacement card
Chip card sale processed without PIN check
Fake sale at non-EMV or hybrid terminal

Prevention:

Check card security features including chip and signature
Ask for PIN entry for chip sales
Use fraud detection tools for all sales
Only use EMV-compliant terminals
Always get correct cardholder check (signature or PIN)

Evidence:

Proof of chip card check for the disputed sale
Records of card reported lost or stolen
Proof sale was approved without EMV chip card

4849: Questionable Merchant Activity

Description:

A seller breaks Mastercard's rules or appears on their security list.

Cause:

Seller processed sales after being listed in Mastercard's Global Security Bulletin
Sale breaks Mastercard rules or merchant is on security list
Acquirer processed sale for merchant later listed in Security Bulletin
Merchant broke QMAP or GMAP rules

Prevention:

Check sales against Mastercard's Global Security Bulletin often
Follow Mastercard rules and regulations strictly
Act fast if told of any rule breaks
Keep accurate sale records

4837: No Cardholder Authorization

Description:

A cardholder claims they didn't approve or take part in a sale.

Causes:

Lost or stolen card used without owner's permission
Unclear billing name leads to unknown charge
Unapproved use of card by family or friend
Accidental processing of wrong account number

Prevention:

Use 3D Secure
Create clear, known billing names
Check card security code for remote sales
Get signatures for in-person sales
Use pre-sale fraud detection services

Evidence:

Sales receipt with matching signature or approval code
Proof of delivery or service confirmation
IP address or location data for online buys

4870: Chip Liability Shift

Description:

A fraudster uses a fake EMV chip card, but the sale is processed without using the chip.

This lets the fake sale go through, skipping the security features of the EMV chip tech.

Causes:

Chip card processed as magnetic stripe sale
Fake use of copied EMV card info
Sale processed on non-EMV compliant device
Failure to use chip reading tech

Prevention:

Use EMV-enabled terminals and keep them up-to-date
Train staff to always insert chip cards, not swipe
Check cardholder identity for high-value sales
Create imprints for all card-present sales

Evidence:

Proof of EMV terminal capability and setup
Sale records showing chip check failure
Staff training records on EMV processing
CCTV footage or witness statements of the sale

4840: Fraudulent Processing of Transactions

Description:

A cardholder claims they approved only one in-person sale, but more unapproved sales happened within 15 minutes.

Causes:

Unapproved sales occur shortly after a valid purchase
Multiple charges processed without cardholder permission
Merchant error in processing duplicate or extra sales
Potential misuse of card info during a real sale

Prevention:

Give credits quickly
Review all sale receipts before deposit
Submit sale batches only once
Void charges if customer changes payment method
Train staff to prevent accidental multiple charges

Evidence:

Proof of separate, approved sales for different goods/services
Proof of cardholder's part in both valid sales
Explanation and proof refuting the cardholder's claim
Proof of following Mastercard's chargeback rules

C. Authorization-Related

4834: Late Presentment

Description:

A sale is processed outside the allowed timeframe.

Causes:

Multiple unapproved sales follow a single approved purchase within 15 minutes
Seller fails to process the sale within the required 30-day period
System errors or tech issues delay sale processing beyond the allowed time
Seller batches sales infrequently, causing processing delays

Prevention:

Process sales quickly, ideally on the day of purchase
Check and match sales to avoid delays
Use automated systems for timely sale processing
Train staff on the importance of quick sale submission
Set up alerts for sales nearing the 30-day limit

Evidence:

Valid reasons for delay (e.g., tech issues, holidays)
Proof of approval and timely presentation
Proof of sale's validity or previous refund

Cardholder-Activated Terminal (CAT) 3 Device

Description:

A sale is processed through a Cardholder-Activated Terminal (CAT) Level 3 device without approval.

Causes:

Sale amount was higher than the CAT 3 device limit
Card used at the terminal was expired or invalid
Tech issues at the terminal

Prevention:

Set correct sale limits on CAT 3 terminals
Update terminal software often and check for issues
Show sale limits and card rules at terminals
Train staff to help customers with CAT 3 sales

Evidence:

Sale records showing amount, date, and card status
Terminal logs that show errors or malfunctions

Expired Chargeback Protection Period

Description:

A sale is settled after the allowed dispute timeframe.

Causes:

Sale settled after the dispute window closed
Cardholder's account became inactive or compromised
System issues delayed chargeback processing
Seller failed to settle the sale quickly

Prevention:

Settle sales within the required timeframe
Use fraud detection tools for early warning
Check and match sales often
Get approval before processing any sale

Evidence:

Proof of on-time sale approval and settlement
Records showing the cardholder's account status
Proof that you've already refunded the sale

Account Number Not on File

Description:

Issuing bank can't find an account matching the number used in the sale.

Causes:

Account closed before sale settlement
Use of stolen or fake card details
Sale processed with a retired account number
Account number not listed on Electronic Warning Bulletin
Offline chip approval for sales below the limit

Prevention:

Check account info before submitting sales
Match billing address with issuer's records
Use systems to spot suspicious sales
Implement measures to identify high-risk orders

Warning Bulletin File

Description:

The issuer can't confirm that the seller got approval for a sale.

Causes:

Seller processed sale without getting approval
Approval requested after sale was completed
Vendor ignored declined approval and processed anyway
Tech issues prevented approval recording

Prevention:

Always get approval before processing sales
Follow correct approval steps and timing
Check and maintain approval systems often

Evidence:

Proof of valid approval at time of sale
Sale records with approval code and timestamp

Authorization-Related Chargeback

Description:

A merchant processes a sale without approval.

Causes:

Approval not obtained before settling the sale
Approval requested after the sale date
Use of an expired or invalid approval code
Forcing a sale after initial decline
Multiple card swipes following an approval decline

Prevention:

Always get approval before settling sales
Check that approval codes are valid and current
Ensure point-of-sale systems work correctly
Train staff on approval procedures
Never override declined sales

Evidence:

Sale receipts showing approval

Required Authorization Not Obtained

Description:

A merchant processes a sale without getting the required approval from the card issuer.

‍Causes:

Approval request wasn't sent or got lost
Sale processed before getting approval
Tech problems prevented approval
No approval obtained for offline purchases
Unauthorized use of payment details

Prevention:

Always get approval before finishing a sale
Check that processing systems work correctly
Follow steps for offline sales
Use tools to spot suspicious activity
Train staff on approval procedures

Evidence:

Records of attempted or obtained approval
Communication with processor about the issue
Documents showing any tech problems
Signs of potential unauthorized card use

Multiple Authorization Requests

Description:

A card-not-present sale is initially declined but later approved through alternative processing methods.

These methods include Stand-In processing or X-Code, used to approve initially rejected sales.

Causes:

Merchant tried multiple card swipes after initial decline
Alternative approval methods used after first decline
Staff lack training on approval procedures
System errors

Prevention:

Attempt approval only once per sale
Request different payment if initial approval fails
Ensure system function to avoid duplicate requests
Train staff on correct approval and error handling
Follow card network rules strictly

Evidence:

Records showing single approval attempt
Proof of message codes for multiple clearing records
Records of customer resubmitting order after initial denial

D. Point-of-Interaction Errors

Transaction Amount Differs

Description:

The final charge doesn't match the agreed amount.

Causes:

Merchant charges twice by mistake
Hidden fees or tips added after approval
Wrong currency conversion
Receipt and bill don't match
Merchant changes amount without permission

Prevention:

Get clear consent for changes after approval
Show all fees before sale
Check billed amount matches approved amount
Ensure correct currency conversions
Give detailed receipt with exact billed amount

Evidence:

Original receipt matching approved amount
Proof of customer's consent for changes
Documents supporting final charge accuracy
Currency conversion records, if needed

Duplication / Paid by Other Means

Description:

A single purchase is charged more than once to a customer's account.

Causes:

Merchant submits same transactions multiple times
Customer starts purchase more than once
Merchant makes duplicate receipts for one sale
Transaction uses multiple payment methods
Merchant deposits receipts with different acquirers

Prevention:

Use software to find duplicate transactions
Train staff on correct processing
Give clear checkout instructions
Check receipts before depositing
Refund extra charges quickly

Evidence:

Detailed transaction history
Related system error documents

Loss, Theft, or Damages

Description:

An upfront charge for possible loss, theft, or damage to vendor's property.

Causes:

Charging for possible damage without approval
Unclear policies on extra fees
Poor communication about extra charges
Wrong billing for rentals or valuable items

Prevention:

Make clear deposit rules for rentals
Document item condition before and after use
Explain all possible charges clearly
Process damage charges separately
Get written agreement on policies first

Evidence:

Signed agreement on damage and fee policies
Photos or videos of item condition
Proof of repair or replacement costs

Point of Interaction Error

Description:

A sale error where one transaction was processed multiple times.

It covers wrong or repeated charges for the same purchase.

Causes:

Merchant processes same transaction twice
Customer charged wrong amount
ATM gives less cash than asked
Merchant submits transaction late
Currency conversion errors or no customer agreement

Prevention:

Check amounts twice before processing
Keep detailed transaction records
Follow proper currency conversion steps
Update point-of-sale systems often

Evidence:

Original transaction receipt
Documents showing correct amount
Proof of currency conversion agreement
System records of the transaction

Point-of-Interaction Currency Conversion

Description:

Problems with currency conversion during a sale.

Causes:

Customer unaware of Dynamic Currency Conversion (DCC)
Wrong or unfair conversion rate
Transaction currency differs from card network's
No currency choice or wrong conversion use

Prevention:

Get clear permission for DCC transactions
Use fair conversion rates
Give receipts with both currencies
Train staff on different currency procedures

Evidence:

Proof of customer's DCC agreement
Records of accurate conversion rates
Transaction records with both currencies

ATM Disputes

Description:

Cardholder claims wrong cash or multiple charges for one withdrawal.

Causes:

ATM malfunction giving wrong cash
Technical issues causing multiple charges
Mistake in entering withdrawal amount

Prevention:

Check ATMs often
Fix reported errors quickly
Give clear ATM use instructions
Report balance issues promptly

Evidence:

ATM transaction logs and videos
ATM maintenance records

E. Additional Codes

4850: Installment Billing Dispute

Description:

A buyer disputes a charge from an installment payment plan.

Causes:

Buyer misunderstands payment terms
Billing errors cause overcharges
Customer claims cancellation but still gets billed
Merchant charges wrong amount or time
Cardholder questions installment charge accuracy

Prevention:

Explain payment terms clearly before agreement
Send reminders before each due installment
Ensure correct billing with detailed info
Provide easy cancellation with confirmation
Train staff on billing accuracy importance

Evidence:

Signed installment agreement
Full transaction history of all payments
Records of billing or cancellation conversation
Proof of delivery for each installment

4854: Cardholder Dispute Not Classified Elsewhere (USA)

Description:

A customer fails to resolve an issue with a merchant.

Causes:

Friendly fraud
Merchant didn't offer a fair solution
Poor communication between merchant and shopper

Prevention:

Handle complaints quickly
Offer fair solutions for disputes
Record all customer discussions
Train staff to handle issues well
Make clear rules for solving disputes

Evidence:

Detailed logs of all customer interactions
Proof of tries to fix the issue
Records of solutions offered to customer
Timestamps showing quick responses to complaints

3. American Express Chargeback Reason Codes

All American Express (AmEX) reason codes will have a 3-digit alphanumeric code.

The following letters in the beginning of the code represent these categories:

C: Card Member disputes
M: Vehicle-related chargebacks
P: Processing errors
A: Authorization errors
FR: Fraud and chargeback programs
R: Misc. codes

The 2-digit number following the letter represents the specific reason code.

Let’s use code F30 as an example:

“F” means it’s in the fraud category.
“30” means that it’s an EMV counterfeit.

Find more information regarding American Express’s reason codes here.

Or details on their chargeback process in this guide.

Let’s dive into these codes.

A. Card Member Dispute

C02: Credit Not Processed

Description:

The cardholder says they should get a refund, but it's not on their card.

Causes:

Credit not done before latest bill
Refund less than expected
Customer misunderstood return policy

Prevention:

Do credits fast for right amount
Clearly tell refund dates and amounts
Make return policies easy to find
Tell cardholders when credits are done
Do all promised refunds quickly

Evidence:

Explain why no credit is due
Proof that credit was done
Documents supporting partial credit

C02: Credit Not Processed

Description:

A customer returns goods or refuses services without getting a refund.

Causes:

Merchant didn't refund returned goods
No credit for refused delivery
Confused about return or refund rules
Slow processing of return credits

Prevention:

Refund fast when goods return
Show return and refund rules clearly
Tell customers when credits are done
Use "click to accept" for online rules
Explain partial refunds before processing

Evidence:

Proof goods were taken (e.g., signed slip)
Proof credit was already done
Copy of return policy and how told
Explain how return broke stated rules

C04: Goods / Services Returned or Refused

Description:

Cardholder says they returned goods or refused services without refund.

Prevention:

Do refunds and credits fast
Tell customers when credit is done
Show refund rules near signature line
Make return rules clear before sale

Evidence:

Show return policy and how told
Prove cardholder took goods or services
Show proof of refunded amount
Detail any return rule breaks

C05: Goods / Services Canceled

Description:

A customer says they canceled an order without refund or cancellation.

Causes:

Didn't process cancellation request
Late or missing refund after canceling
Unclear cancellation rules
Confused about cancellation terms
Poor order management system

Prevention:

Refund on cancellation day
Show cancellation rules clearly before sale
Make customers accept terms before buying
Give cancellation confirmation numbers
Tell expected refund date to customers

Evidence:

Copy of cancellation rules
Proof of refund already done
Proof customer broke cancellation rule
Charge record with customer-accepted terms

C08: Goods / Services Not received or Only Partially Received

Description:

A customer claims missing or partial goods or services.

Causes:

Late or no shipping of goods
Only part of order shipped
Unclear delivery expectations
Charged before shipping items
Order not ready for pickup

Prevention:

Give real delivery dates and update delays
Ship to full address and get proof
Don't charge for backordered items
Get signatures for store pickups
Refund fast if goods aren't received

Evidence:

Signed pickup form for store collection
Digital goods: IP or email matching download
Airline: boarding pass or related buys
Signed work order for services

C14: Paid by Other Means

Description:

A customer proves they paid using a different method than the charged card.

Causes:

Merchant didn't void card charge when customer paid differently
Many payments done for one buy
Wrong payment form billed
Customer changed payment after first card offer
Errors in final amount math

Prevention:

Check all payments and use right form
Give credits fast when billing errors found
Check math and final amounts before charging
Void charges if customer picks new payment

Evidence:

Proof other payment wasn't for disputed charge
Proof customer agreed to use card

C18: “No Show” or CARDeposit Canceled

Description:

You billed for services the cardholder thought were canceled.

Causes:

Cardholder says canceled booking was billed
No refund for deposit
Cardholder claims cancellation wasn't done
Deposit charge credit not received
Cardholder thinks services billed wrongly after canceling

Prevention:

Do cancellations right away
Give cancellation number to guest
Record cancellation numbers as rules say
Tell customers cancellation rules when booking

Evidence:

Proof of valid "no show" booking or deposit

C28: Canceled Recurring Billing

Description:

Cardholder claims charge for recurring payment they tried to stop.

Causes

Customer didn't get billing or auto-renewals
Merchant billed for intro offer without approval
Vendor charged after account closed
Seller didn't stop charges after being told
Consumer lies about damaged or wrong goods

Prevention:

Stop future bills right when asked
Send cancellation proof to customer
Show cancellation rules clearly before orders
Tell customers about coming charges
Don't bill without cardholder's approval

Evidence:

Copy of your cancellation rules
Proof customer used service after charges
Proof shopper agreed to terms

C31: Goods / Services Not as Described

Description:

Goods or services were different or faulty compared to what was promised.

Causes:

Friendly fraud

Prevention:

Give clear, true product details
Pack items to avoid shipping damage
Refund or replace bad products fast
Never sell fake or misrepresented products
Give quick help to solve disputes

Evidence:

Proof goods matched purchase description
Proof cardholder took product "as is"
Photos or emails showing goods were as promised
Proof of tries to fix or replace bad goods

C32: Goods / Services Damaged or Defective

Description:

The goods or services received were damaged or faulty.

Causes:

Goods broke during shipping
Services didn't meet hopes
Items were faulty or broken
Packing wasn't good enough
Poor quality checks

Prevention:

Pack goods safely to avoid damage
Fix issues with faulty goods fast
Offer new items or refunds when needed
Show return and refund rules clearly
Give quick help for claims

Evidence:

Proof goods weren't damaged or faulty
Proof customer took goods as delivered
Proof refund was done
Proof goods weren't returned as per rules
Proof customer took items "as is"

M10: Vehicle Rental - Capital Damages

Description:

Cardholder claims wrong charge for rental vehicle damage.

Causes:

Customer thought insurance would cover damage
Damage costs were more than agreed
Cardholder denies causing damage
Merchant made math error
Cardholder misunderstood damage duty

Prevention:

Confirm customer agrees to damage duty
Keep proof of customer's charge consent
Ensure charges don't top 110% of agreed amount
Explain cardholder's duties clearly before charging
Check final damage costs before billing

Evidence:

Signed rental agreement
Full damage report, with date and time
Before-and-after vehicle photos showing damage
Copy of rental rules on damages and fixes

M49: Vehicle Rental - Theft or Loss of Use

Description:

Cardholder claims wrong charge for rental vehicle theft or loss.

Causes:

Merchant billed for AmEX-covered costs
Merchant didn't explain rental charges well
Charges came after rental period ended

Prevention:

Use GPS trackers in rental cars
Offer and push full theft and loss coverage
State liability terms clearly in rental
Keep records proving valid charges
Give credits to solve fought charges

Evidence:

Signed rental deal with theft and loss terms
ID and credit check records
Police report for theft or loss event

B. Fraud

F10: Missing Imprint

Description:

This applies to card-present purchases without magnetic stripe or chip use.

Causes:

Card not swiped or chip not read well
Family used card without approval
Merchant charged without card data
Wrong account billed due to merchant mistake
Sale done on bad card account

Prevention:

Always swipe cards or use chip readers
Use manual imprint machines as backup
Check cardholder ID for all purchases
Use right check method (sign, PIN) for each transaction

Evidence:

Signed receipt or approval slip
Copies of customer ID used during sale
Logs of card checks (AVS, CVV)
Imprinted charge record

F14: Multiple ROC’s

Description:

A customer approves one valid sale but fights more charges from same seller.

Causes:

Merchant sends extra charges without customer's knowledge
Customer doesn't get a copy of signed receipt
Sign on receipt is unclear or faded
Original receipt is lost or scanned badly
Many charges sent for one approved charge

Prevention:

Only charge for valid customer buys
Get customer permission before sending multiple charges
Get approval for every charge
Keep good records and update software often

Evidence:

Signed copies of all related sale records
Full billing details for each charge

F24: No Card Member Authorization

Description:

A cardholder denies making a buy, even if they've bought before.

Causes:

Unauthorized card use by family
Card details stolen and used
Merchant charged wrong account number

Prevention:

Use clear billing names with business name and place
Use fraud checks like CID and Address Verification
Use EMV-ready tills for in-person sales
Check customer ID and approval for card-not-present purchases

Evidence:

Signed receipt from cardholder
Valid approval code for the fought transactions
Proof linking customer's approval to the specific purchase

F29: Card Not Present

Description:

An unauthorized sale happened without a physical card.

Causes:

Card or number used wrongly after being stolen
Friendly fraud
Unclear merchant name makes cardholder think purchase is fake
Unauthorized claim done with wrong or stolen account number

Prevention:

Get clear customer approval for billing specific goods
Use fraud checks like card security codes and address checks
Use pre-sale fraud checks to verify cardholder ID
Use clear billing descriptors for all sales
Tell card-present and card-not-present purchases apart clearly

Evidence:

Proof of CID check try with "unchecked" or no answer
Proof goods were sent to the checked address
Flight proof (boarding pass, list) for travel fights
Proof of miles earned during the fought flight
Proof of more buys tied to the first sale

F30: EMV Counterfeit

Description:

A cardholder denies a purchase made with a fake chip card.

Causes:

POS not chip-ready
Chip reader not used for the sale

Prevention:

Use EMV-ready POS and keep them up to date
Always use right cardholder check (sign, PIN)
Get more checks for typed purchases (imprint, CID)
Train staff on handling POS issues
Tell card-present and card-not-present sales apart when clearing

Evidence:

Proof that POS processed a chip card sale
Proof of valid card-not-present purchase, if needed

F31: EMV Lost / Stolen / Non-Received

Description:

A fraudster uses a lost, stolen, or caught credit card.

Causes:

Wrong use of a lost or stolen credit card
Till not set up with chip-and-PIN tech
Typing card info instead of scanning
Not checking cardholder ID during sale
Wrong ID of card-present vs card-not-present purchases

Prevention:

Use EMV-ready tills for all sales
Get more checks like card imprint or PIN
Train staff on handling till issues

Evidence:

Security camera footage of the purchase
Proof of PIN check for chip card purchases

C. Processing Errors

P01: Unassigned Card Number

Description:

A merchant uses an invalid or wrong card number for a purchase.

Causes:

Purchase done with old or canceled card number
Repeat billing using expired or new card
Customer gave wrong card info
Seller made mistakes when entering card details
Card number no longer tied to active account

Prevention:

Check card numbers well before charging
Use extra customer checks like PINs
Keep repeat billing info up to date
Train staff on card number entry
Use auto card number check systems

Evidence:

Card imprint copy showing right number
Proof of approval for the card
POS charge record with machine-read card number

P03: Credit Processed as Charge

Description:

A merchant does a debit instead of a credit.

The cardholder says they should have got money back.

Causes:

Staff error in processing
System glitch causing wrong sale type
Confusion over voiding versus crediting a purchase

Prevention:

Double-check transaction type before processing
Give credits within 7 days
Clearly state refund times in rules

P04: Charge Processed as Credit

Description:

A merchant does a refund instead of a charge.

The cardholder says they should have been charged, but got money instead.

Causes:

Mix-up between credit and debit purchase types
Staff error in handling payments
System glitch causing wrong transaction processing

Prevention:

Train staff on right debit, credit, and reversal steps
Double-check purchase type before processing
Use a system to catch and stop mistake credits

P05: Incorrect Charge Amount

Description:

The processed purchase amount differs from what the cardholder agreed to pay.

Causes:

Merchant made a mistake in entering or figuring the amount
Surprise fees or charges were added to the sale
Transaction amount was changed without cardholder's approval
Late charges were applied without notice
Errors happened during money change or tax math

Prevention:

Double-check all math before processing the purchase
Get approval for any changes to the sale amount
Use card readers when possible to avoid typing errors
Clearly tell all fees and charges upfront to customers
Train staff to avoid changing purchase amounts without approval

Evidence:

Receipts showing the cardholder approved the final charge amount
Proof of customer's approval for extra or late charges

P07: Late Submission

Description:

A merchant fails to process a sale within the required time.

The delay in submitting the charge can cause problems.

Causes:

Transaction processed more than 181 days after purchase
Account closed before late transaction posting

Prevention:

Automate purchase submission process
Often check for and fix late submissions
Process payments on the day of sale
Complete payment batches promptly

Evidence:

Proof of timely charge submission

P08: Duplicate Charge

Description:

A single purchase is processed more than once, causing multiple charges.

Causes:

Merchant sends multiple batches at once
Sale has multiple receipts
Duplicate entries in the merchant's system
Purchase processed but customer paid other way
Failed charge processed again without checking

Prevention:

Check if failed charges went through before trying again
Check receipts to avoid double-billing customers
Fix or credit promptly upon seeing errors
Look at all receipts before banking
Train staff on credit handling steps

Evidence:

Proof each charge is right
Proof of credit given to fix fought charge

P22: Non-Matching Card Number

Description:

The card number used in a sale doesn't match the first card number.

Causes:

Merchant entered wrong card number during processing
Purchase processed to an invalid account number
Card used is not assigned to the cardholder
Issuer's main file doesn't have the processed account number

Prevention:

Process charges right away and match card numbers with approvals
Use card swipe or chip readers when possible
Double-check all card numbers
Verify account numbers for card-not-present purchases
Train staff on right purchase processing steps

Evidence:

Card imprint copy showing the right card number
Charge record from till that machine-read the card
Proof of approval for the sale
Proof showing the card number matches the approved account

P23: Currency Discrepancy

Description:

A transaction is processed in a different currency than agreed upon.

Causes:

Transaction processed in an incorrect currency
Wrong currency used
No info on currency swap
Customer didn't agree to DCC
Merchant error

Prevention:

Use the right currency
Let customers pick currency swap
Tell customers about swaps and fees
Train staff on currency issues
Make sure systems work with many currencies

Evidence:

Share records of right currency use

D. Authorization

A01: Charge Amount Exceeds Authorization Amount

Description:

The charged amount is more than what was approved.

Causes:

Charging more than allowed
Typing errors when entering details
Processing after approval expired
Using an old card
Going over merchant's limit without approval

Prevention:

Only charge what's allowed
Train staff on approvals
Process quickly before approval expires
Stay within tip limits
Don't use declined or old cards

Evidence:

Show records of first approved amount
Give proof of full charge approval
Show purchase didn't need approval

A02: No Valid Authorization

Description:

A merchant processes a sale without approval.

Causes:

No valid approval for sale
Card was old or account closed
Request denied, but sale still made
Amount higher than limit
Authorization code used after it expired

Prevention:

Always get approval before sale
Check card date, ask for new payment if old
Don't process denied sales
Keep amount within limit
Get approval on purchase day

Evidence:

Proof of valid approval for sale
Logs of approval date, time, method
Show sale was before card expired
Proof of refund already given

A08: Authorization Approval Expired

Description:

A merchant processes a sale after the approval has expired.

Causes:

Charge not sent before approval expired
Technical issues stopped timely sending
Sale processed outside valid time

Prevention:

Send charges within a week of approval
Ask for new approval after a week
Follow time rules for specific trades
Send sales to bank quickly, same day if possible

Evidence:

Proof of valid consent within agreed time

E. Chargeback Programs

FR2: Fraud Full Recourse Program

Description:

Merchants join this program when they have too many fake sales.

Causes:

Too many fraudulent sales

Prevention:

Use fraud checks and 3D Secure
Always get approval for online sales
Check account number before sale
Label sales right, like "not in person"
Make billing names clear and simple

FR4: Immediate Chargeback program

Description:

AmEX can process most disputes right away, except real fraud.

Causes:

AmEX added merchant due to high disputes

Prevention:

Cut down on disputes

FR6: Partial immediate Chargeback Program

Description:

AmEX can process some disputes right away when filed.

Causes:

AmEX added merchant due to high disputes

Prevention:

Cut down on disputes

F. Other Codes

R03: Insufficient Reply

Description:

The merchant didn't give full documents as asked.

Causes:

Documents late or not given
Merchant ignored information request
Sent docs didn't meet needs

Prevention:

Submit all requested documents without missing details
Make sure docs are clear
Keep proof of sending all information

Evidence:

Full copies of all asked documents
Proof of sending info on time

R13: No Reply

Description:

The merchant didn't answer an AmEX query within 20 days.

Evidence:

Proof you answered within 20 days

M01: Chargeback Authorization

Description:

The merchant let AmEX do a chargeback for a disputed charge.

‍

Causes:

Merchant fought the charge
Charge done by mistake
Customer asked for money back
Merchant agreed to undo charge
Sale was not valid

4. Discover Chargeback Reason Codes

All Discover card transactions and JCB transactions that use USD fall under Discover’s reason codes.

All reason codes have 2 – 4-digit alphanumeric codes. Many of these are easy-to-recognize acronyms.

For instance, “DP” means “Duplicate Processing.”

Easy, right?

Codes like “IC” aren’t. Can You guess what that means?

It’s “Illegible Sales Data.”

Learn more about these codes here.

And here’s information about Discover’s chargeback process.

Let’s get into deciphering these codes.

A. Service Dispute Codes

05: Good Faith Investigation Chargeback

Description:

A card user fights a charge after the allowed time.

Causes:

Card user finds fake charges later

Prevention:

Keep full sale records
Use strong fraud checks
Talk with customers about sales

AA: Does Not Recognize

Description:

A customer says they don't know or recall approving an order.

Causes:

Customer forgot sale or doesn't know charge
Family used card without telling
Wrong or unclear name on bill
Friendly fraud
Card info stolen or account hacked

Prevention:

Use clear billing descriptors
Send order confirmations
Respond to customer inquiries fast
Use AVS and CVV checks

Evidence:

Web data linking card user to buy
Proof the customer got the items

AP: Recurring Payments

Description:

Customer stopped a repeat service and says they didn't know or approve the charges.

Causes:

Repeat billing rules not clear
Fraudulent transactions occurred
Charges made on closed account
Charge amount went up without telling

Prevention:

Clearly explain repeat billing and how to quit
Make quitting easy
Tell customers before charging
Use clear billing statements to avoid confusion
Stop billing after cancellation

Evidence:

Accepted agreement showing billing consent
Proof of a clear cancellation policy shared
Transaction history, including charges and cancellation attempts
Proof the customer didn't quit right

DP: Duplicate Processing

Description:

You charge a card user twice for one sale.

Causes:

Pay system errors cause double charges
Merchant sends many batches for one sale
Card user paid another way, but card charged

Prevention:

Track and manage all sales
Refund duplicate charges fast
Train staff on correct transaction procedures
Check all receipts before sending batches
Send each sale batch once only

AW: Altered Amount

Description:

The charged amount differs from the first approved sum.

Causes:

Wrong amount entered during processing
Extra fees added without consent
Payment system errors
Fraud
ATM gives out a different sum

Prevention:

Check if the charge matches the approved amount
Tell buyers about extra fees
Update payment systems often
Make sure ATMs give out the right cash amount

Evidence:

Approved amount record, like a receipt
Buyer agreed to final amount
ATM cash payout or cash advance proof

CD: Debit/Credit Posted Incorrectly

Description:

The buyer saw a new charge instead of a refund.

Causes:

Error in fixing a past charge
System bug
Purchase didn't match first approval

Prevention:

Verify the purchase type before processing
Use right codes for refunds
Review purchase records for errors
Train staff to post transactions right

NF: Non-Receipt of Cash from an ATM

Description:

The buyer says they got less cash from an ATM withdrawal.

Cause:

ATM broke during use
Bad ATM upkeep

Prevention:

Check ATMs often
Give clear steps on ATM screens
Use tools to catch and stop fraud
Watch ATM transactions for odd activity
Fix ATM cash errors fast

Evidence:

ATM transaction logs
Camera footage from the ATM
ATM upkeep records

PM: Paid by Other Means

Description:

The consumer says they paid using a different method.

Causes:

Duplicate payments occurred
Buyer thought they used another way to pay
Seller didn't void extra transactions
Buyer charged after paying another way

Prevention:

Check payments before charging
Train staff to avoid double charges
Ask how buyer wants to pay before charging
Void purchases when buyer changes pay method

RG: Non-Receipt of Goods, Services, or Cash

Description:

The customer says they paid but got nothing.

‍

Causes:

Goods sent to wrong place
Buyer not told about shipping status
Store charged before shipping
Buyer lies about not getting items
Friendly fraud

Prevention:

Use tracked shipping
Tell buyers when items will arrive
Give goods or help as promised

Evidence:

Shipping proof, like signed receipts
Logs showing proof of downloads

RM: Cardholder Disputes the Quality of Goods/Service

Description:

The buyer says items or help were bad or not as described.

Causes:

Items didn't work or were broken
Goods did not match the description or ad
Services were incomplete
Quality was poor
Friendly fraud

Prevention:

Use clear, accurate product descriptions and images
Check orders before sending
Pack items well to avoid damage
Don’t sell fake goods

Evidence:

Proof item was delivered
Proof the product or service matched the agreement

RN2: Credit Not Processed

Description:

The buyer didn't get an expected refund.

Causes:

Store didn't give promised refund
Refund is slow to show up
Buyer and store mixed up refund steps
Buyer refused delivery but no refund given
Store doesn't take returns, but buyer wanted refund

Prevention:

Give refunds fast
Show clear refund rules on receipts
Check and fix your return rules if needed
Tell buyers refund steps clearly

Evidence:

Your refund policy

IC: Illegible Sales Data

Description:

The receipt is unclear or unreadable.

Causes:

Too faded or damaged to read
Details like authorization code is missing
Slip printed on bad paper, hard to read
Receipt is mishandled or scanned at a reduced size
Ink or toner issues

Prevention:

Print slips clearly with all purchase information
Use good ink in printers
Don't print on rough or colored paper
Scan slips full size to keep them clear
Maintain POS systems to ensure clear output

Evidence:

Clear, readable copy of first sales receipt

B. Codes for Fraudulent Transactions

UA01: Card Present

Description:

A card-present transaction, such as at a store, is disputed by the cardholder as fraud.

Causes:

Lost or stolen card before purchase
Counterfeit card used
Card info stolen through skimming
Merchant processed without approval
Cardholder denies involvement

Prevention:

Ask for ID for in-person sales
Check card for tampering
Use EMV chip for all sales
Watch for odd behavior
Get approval for all sales

Evidence:

Signed receipt copy
Video of sale
Proof of cardholder presence
Documents proving cardholder ID

UA02: Card Not Present

Description:

A sale happens without the card there, often online or by phone.

Causes:

Stolen card used
Friendly fraud
Merchant sells without approval
Seller retries declined card

Prevention:

Use address verification and card verification value checks
Encrypt and secure customer data to prevent fraud
Teach safe online shopping
Stop if card is declined
Never override or force declined card authorizations

Evidence:

Sale details and security checks
Records of customer contact
Proof of delivery or signed receipts
Logs of customer downloads

UA05: Chip Card Counterfeit

Description:

A card-present transaction was processed using a fake chip card on a non-EMV-compliant terminal.

Causes:

Criminals clone a card's chip
Terminal was not EMV-compliant, leading to a magnetic stripe swipe
Processor didn't send full chip data
Fraud by unauthorized person

Prevention:

Use new chip-reading machines
Train staff to spot fake cards
Try chip first, swipe only if needed
Use extra checks for safety
Always verify cardholder

Evidence:

Logs proving chip reader use
Proof of stripe use as backup

UA06: Chip-and-Pin Transaction

Description:

The sale used a mixed chip-stripe card on a machine that lacked PIN entry.

Causes:

The magnetic stripe was swiped instead of using the chip
Machine had no PIN pad
Fake card used
Chip data not sent fully

Prevention:

Upgrade machines for chip and PIN
Use chip first, even on mixed cards
Always require PIN when possible
Get approval for every sale
Train staff on machine issues

Evidence:

Logs proving chip and PIN use

UA10: Requested Receipt (Swiped Card Transaction)

Description:

Discover needs more information about an in-person swiped card sale.

Causes:

Signature doesn't match card
Unclear or partial receipt
No sale approval obtained
Cardholder reports unknown charges
Card print lacks security features

UA11: Cardholder Claims Fraud

Description:

A cardholder says an in-person sale was fraud.

Causes:

Real fraud occurred
No signature obtained
Broken signature device
No approval obtained

Prevention:

Always get signatures for swipes
Check receipt signature matches card
Train staff on signature checks
Use chip devices for sales
Get clear signed receipts

Evidence:

Receipt with clear signature
Video of sale
Witness statements
Approval records

C. Processing Errors & Authorization

AT: Authorization Noncompliance

Description:

A card transaction goes through without issuer approval.

Causes:

Merchant processes without issuer approval
Card is past its expiry date
System error
Transaction forced after initial decline
Approval obtained after card expires

Prevention:

Check card expiry date
Follow Discover's approval rules
Update payment systems often

Evidence:

Approval record showing positive response
Receipt with matching approval amount
Proof transaction happened before card expired

IN: Invalid Card Number

Description:

A transaction uses an invalid card number.

Causes:

Customer gives wrong card details
Merchant enters card info wrong
Expired card is used
Non-existent card number used
Mistakes in recording card details

Prevention:

Check all card details twice
Look at card expiry date closely
Use tools to check card numbers
Train staff on card entry

Evidence:

Full transaction records with card number
Emails with customer about the transaction
Logs of card checks

LP: Late Presentment

Description:

A merchant processes a transaction too late.

Causes:

Technical issues delay the merchant's system
Errors in processing many transactions at once
Merchant forgets to process on time
POS system problems cause delays
Account is no longer valid when processed

Prevention:

Set up systems for quick processing
Check and fix POS systems often
Train staff on quick processing
Set reminders for pending transactions

Evidence:

Records showing timely processing
Proof of approval and correct card number

DA: Declined Authorization

Description:

A merchant processes a transaction Discover already declined.

Causes:

Merchant processes after getting a decline
Approval isn't asked for before processing
Many tries are made on a declined card
Merchant tries to bypass a declined approval

Prevention:

Always get approval first
Stop the sale if a card is declined
Ask for a different payment method
Never force through a declined approval

EX: Expired Card

Description:

A transaction uses an expired card.

Causes:

Card expires before the sale date
Merchant processes without approval
Card expires between sale and processing
System fails to catch an expired card
Customer uses an old card by mistake

Prevention:

Always check card expiry date
Train staff to handle expired cards
Update systems to catch expired cards
Ask for approval on all transactions
Check expiry claims for online sales

Evidence:

Receipt showing card details and date

NA: No Authorization

Description:

A merchant processes a Discover card without approval.

Causes:

Merchant doesn't ask for approval
Approval request comes long after the sale
Seller adds tip after initial approval

Prevention:

Always get approval for every sale
Don't change the authorized amount after adding a tip

Wrapping Up

Use reason codes to prevent future chargebacks. It’s not always accurate. However. It’ll give you an opportunity to learn why a dispute happened.

Also…

Consider using chargeback alerts to address issues before they become disputes. We make alerts easy to integrate with your brand.

And we've reduced chargeback rates by up to 91% for some companies.

Try us out. See how we can help.

‍

Theodore Sterling

Educator

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