<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=559746057746957&amp;ev=PageView&amp;noscript=1">

Clearsale Blog

Understanding Credit Card Chargeback Reason Codes

Sarah Elizabeth Zilenovski

By Sarah Elizabeth Zilenovski

Sarah is a Marketing Manager at Clearsale and has been with the company since 2012. During that time, she has developed deep knowledge about fraud prevention. She brings extensive expertise in planning, marketing, go-to-market strategy and sales experience, thanks to a background that spans financial planning, controlling and analysis. She previously spent 5 years with Proctor & Gamble, and she holds bachelor and master degrees in Business with great distinction from a top Brazilian business school.

Understanding Credit Card Chargeback Reason Codes

While no merchant likes to get hit with a chargeback, e-commerce businesses are likely to experience them at some point. These refund requests can have serious repercussions on a company’s bottom line, reputation and ability to process credit card transactions.

Although each card network has its own chargeback reason codes, their end goal is the same: Clearly describe why a customer is disputing a transaction. And when merchants recognize this, they’re better able to identify trends and areas of weakness, evaluate the legitimacy of chargeback claims, prevent future chargebacks and improve customer satisfaction.

Visa Chargeback Codes

Visa uses four main categories — authorization, consumer disputes, fraud and processing errors — to organize its chargeback reason codes.

Authorization

Chargeback Reason

Code

Description

No Authorization

72

The merchant didn’t obtain a valid authorization.

Expired Card

73

A merchant didn’t obtain authorization for a transaction that used an expired card.

 

Consumer Disputes

Chargeback Reason

Code

Description

Services Not Provided or Merchandise Not Received

30

A cardholder tells the card issuer they didn’t receive an order on time or at all.

Canceled Recurring Transaction

41

A customer asked a merchant to cancel a recurring transaction but the merchant failed to do so.

Not as Described/Defective Merchandise

53

A customer believed the product or service didn’t match the description or reported the product as damaged.

Transaction Not Recognized

75

The cardholder didn’t recognize the transaction based on the information provided on their statement.

 

Fraud

Chargeback Reason

Code

Description

Fraudulent Multiple Transactions

57

The cardholder acknowledged placing one transaction but claimed that other transactions were unauthorized (in-person transactions only).

Counterfeit Transactions

62

The cardholder claimed they didn’t authorize or participate in the transaction.

Fraud — Card-Absent Environment

83

The cardholder claimed they didn’t authorize or participate in the card-not-present transaction.

 

Processing Errors

Chargeback Reason

Code

Description

Services Not Provided or Merchandise Not Received

30

The cardholder authorized the transaction but didn’t receive the purchased goods or services from the merchant.

Canceled Recurring Transaction

41

The cardholder canceled a recurring transaction but the merchant didn’t process that cancellation.

Not As Described or Defective Merchandise

53

The merchandise received was damaged or defective or didn’t match the description on the purchase receipt.

 

Mastercard Chargeback Codes

Mastercard released their revamped chargeback reason codes in 2016, grouping them into four major categories: Authorization, cardholder disputes, fraud and point-of-interaction errors.

Authorization

Chargeback Reason

Code

Description

Authorization-Related Chargeback

4808

The authorization code for the transaction at the time of the original sale couldn’t be verified.

 

Cardholder Disputes

Chargeback Reason

Code

Description

Cardholder Dispute

4853

The cardholder reported that the goods or services received were not as described.

 

Fraud

Chargeback Reason

Code

Description

No Cardholder Authorization

4837

Cardholders reported they didn’t initiate a transaction.

Fraudulent Processing of Transactions

4840

A cardholder had control of their card and made a legitimate transaction and subsequent (disputed) transactions were made within 15 minutes.

Questionable Merchant Activity

4849

A merchant violated the terms of the Questionable Merchant Audit Program or threatened the cardholder if they refused to complete the transaction.

Cardholder Does Not Recognize – Potential Fraud

4863

The cardholder didn’t’ recognize the non-face-to-face transaction on their statement.

Chip Liability Shift

Chip/Pin Liability Shift

4870

4871

The cardholder claimed to not have participated in or authorized a transaction. For counterfeit transactions, liability remained with the party that didn’t invest in chip technology.

 

Point-of-Interaction Errors

Chargeback Reason

Code

Description

Transaction Amount Differs

4831

The cardholder claims the amount they agreed to pay differs from the amount charged.

 

American Express Chargeback Codes

American Express uses four main categories — authorization, processing errors, fraud and card member disputes — to classify their chargeback reason codes.

Authorization

Chargeback Reason

Code

Description

Charge Amount Exceeds Authorization Amount

A01

The charged amount was greater than the amount of the authorization approval.

No Valid Authorization

A02

There was no valid authorization approval for the charge the merchant submitted.

Authorization Approval Expired

A08

The authorization approval expired before the charge was submitted.

 

Processing Errors

Chargeback Reason

Code

Description

Incorrect Charge Amount

P05

The transaction amount the merchant submitted was different from the amount agreed to by the cardholder.

Late Submission

P07

The merchant didn’t submit the charge within the established timeframe.

Duplicate Charge

P08

A charge for a transaction was submitted more than once.

 

Fraud

Chargeback Reason

Code

Description

No Card Member Authorization

F24

The cardholder denied the charge, and the merchant couldn’t prove otherwise.

Card Not Present

F29

The cardholder denied they placed an order online, by mail or over the phone.

 

Card Member Dispute

Chargeback Reason

Code

Description

Goods/Services Not Received or Only Partially Received

C08

The cardholder claimed they didn’t receive the goods or services or only partially received the order.

Canceled Recurring Billing

C28

The cardholder reported they canceled or attempted to cancel a recurring subscription for goods or services.

Goods/Services Not As Described

C31

The cardholder claimed the goods or services received are materially different from the description provided at the time of the transaction.

 

How Merchants Can Protect Their Business Against Chargebacks

Although research suggests that 86% of chargebacks are fraudulent and 40% of customers who file a fraudulent dispute will file another within 90 days, merchants don’t have to consider chargebacks an inevitable part of doing business. Merchants can reduce both the frequency of chargebacks and their negative impact on their bottom line by:

  1. Staying current on evolving chargeback codes. By being aware of a card issuer’s codes, merchants can identify which transactions have the potential to affect their revenue, and they can be prepared to dispute the chargeback.
  2. Keeping clear, comprehensive transactional records. Good record-keeping puts merchants in a better position to respond to customer concerns and address transaction disputes in a timely manner.
  3. Monitoring chargeback trends. E-commerce merchants must be able to identify trends in fraudulent activity; noticing patterns helps them avoid future disputes and prevent chargebacks.

Businesses who implement a comprehensive fraud protection solution can also breathe a little easier knowing they’re protected against the increased frequency of card-not-present and friendly fraud. Contact ClearSale today to learn more about our 100% guaranteed protection, which covers your business against any fraudulent transaction that results in a chargeback.

Download Credit Card Fraud eBook 

Sarah Elizabeth Zilenovski

Sarah Elizabeth Zilenovski

Sarah is a Marketing Manager at Clearsale and has been with the company since 2012. During that time, she has developed deep knowledge about fraud prevention. She brings extensive expertise in planning, marketing, go-to-market strategy and sales experience, thanks to a background that spans financial planning, controlling and analysis. She previously spent 5 years with Proctor & Gamble, and she holds bachelor and master degrees in Business with great distinction from a top Brazilian business school.

All from this author